Retail sales fell last month for the sixth straight month on an annualized basis, in a sign that inflation is still dampening consumer appetites ahead of the holiday shopping season.
The sales volume in October fell by 2.6 percent compared to the same month last year.
However, sales remained stable from September, with volumes up 0.7 percent over the month, suggesting a slight increase following the government’s expansive 2023 budget.
This slowdown in spending comes as consumers face price hikes on essential purchases like groceries and fuel amid the cost of living crisis.
As grocery inflation pushed up supermarket prices, consumers opted to shop less, with food and drink purchases down 8.9 percent compared to October 2021.
Earlier this month, research group Kantar revealed that grocery inflation here is at a record 13.4 percent, with consumers paying €941 more a year for their supermarket.
Consumers continued to feel the impact of higher fuel costs in October. While the value of fuel sales rose 18.8 percent during the month compared to October last year, sales volume rose just 1.9 percent.
Furniture purchases also fell by 6 percent over the same period.
However, sales of clothes and shoes rose 6.5 per cent year-on-year, while pub purchases rose 3 per cent as consumers opted to head out in October.
Despite this, bar sales remained 7.5 percent below pre-pandemic levels in February 2020.
Online sales in Ireland also fell to 4.8 percent last month, compared with 5.5 percent in October 2021 and 6 percent in the first year of the pandemic in October 2020.
Overall, October sales remained 3.2 percent higher than before the pandemic, despite inflationary pressures. According to Bank of Ireland’s latest Business Pulse survey, two-thirds of retailers expect their sales to be the same or higher than last year.
And that’s despite the fact that only three out of five shoppers intend to spend as much or more on Christmas gifts this year.
That number reflects a decrease from 2021, when 75 percent of shoppers planned to spend more or the same on gifts.
“What we’ve certainly seen is that a lot more people are being a lot more cautious about their average spend and generally budgeting far more than they may have done in years past,” said Duncan Graham, Managing Director of Retail Excellence, opposite the Irish Independent.
“People had quite a high income during the Covid period as all the support was there and nothing to spend it on so they’ve been spending money on their homes for the past two years.”
He pointed to the current situation where consumers are focused on paying for essentials.
However, Mr Graham said Irish retailers had recorded a “fairly strong Black Friday”, giving hope for the festive season.
“It’s been a reasonable start, a first big weekend,” he said, adding that retailers are expecting a “softer” holiday season after the release of the Omicron variant just before Christmas last year.
Owen Clifford, Head of Retail Sector at Bank of Ireland, said: “There was a lot of pent-up demand brought onto the market in 2021, which impacted retail sales volume. Inflation rates mean people are getting less for their money.
“Sentiment has indeed improved in recent weeks following the budget initiatives,” added Mr Clifford. However, he said retailers would remain “cautious” this year due to changes in spending patterns.
“Because of energy costs and rising interest rates, people have brought their Christmas spending forward and spread it out over several months,” he said.
https://www.independent.ie/business/irish/annual-retail-sales-decline-for-sixth-month-in-a-row-42178939.html Annual retail sales decline for sixth straight month