Falling sales of books, hardware and fuel are leading to a retail slowdown

MONTHLY RETAIL SALES have slowed down because people bought less books, hardware and fuel.

That’s according to new figures from the CSO, which showed that the volume of retail sales in September were down 0.2% compared to August.

When car sales are excluded, this figure improved to an increase of half a percentage point.

Books, newspapers and stationery sales saw the biggest monthly decrease, dropping nearly 15%. Hardware and fuel sales also did poorly.

The clothing sector saw the largest increase, up 8%, followed by bars and electrical goods.

The monthly value of retail sales was down 0.4% in September, while the annual figure increased 1.9%. This figure receded slightly when motor sales are excluded.

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Sterling decline

Although the volume of retail sales was up almost 4% compared to the same month last year, this was the lowest annual increase in almost three years, according to a briefing note from Davy analyst Conall Mac Coille.

“The pace of spending growth has softened from the 6.2% rise in the calendar year 2015,” he noted, adding that the continued fall in retail prices “suggests that sterling’s depreciation against the euro is bearing down on consumer prices, with the UK accounting for close to 33% of imported consumer goods”.

Mac Coille added that the sterling’s continued decline is also “weighing on Ireland’s manufacturing sector”, based on CSO figures for industrial production, which were also published today.

“The more labour-intensive traditional manufacturing sector” in particular is struggling, he said, with industrial production down 1.5% year-to-date.

“Given that close to 40% of exports in traditional manufacturing are destined for the UK market, it is not surprising to see output in this sector struggling,” Mac Coille said.

Reacting to today’s retail figures, ISME chief executive Neil McDonnell called on the government to reduce costs on small businesses operating in the sector.

“High costs in rents, local charges and insurance are undermining the great potential the SME sector has to offer,” he said.

“If these were reduced, SMEs would be in a better position to create employment, putting more people back to work, and more money back in people’s pockets, and the local economy.”