Retail sales are going in the opposite direction amid rising inflation

Retail sales turned negative last month for the first time since the end of the Covid-19 emergency, as high inflation began to impact spending patterns.

Ales volumes fell 1.3 percent monthly in June and were down 6.6 percent year-on-year, according to figures released Thursday by the Central Statistics Office.

The decline came amid rising inflation, which hit 9.1 percent in June, marking a reversal of the recovery in the domestic economy hit by the pandemic.

May retail sales were flat, while April retail sales volume rose 4.1 percent mom, the strongest monthly sales in more than a year.

The value of sales in June was also down. Excluding spending on car sales, the figure fell 0.1 percent on a monthly basis but was up 3.2 percent compared to 2021.

Despite the drop, total sales volume in February 2020 was still 2.4 percent above pre-Covid levels.

In June, department store sales rose by almost a fifth. Books, newspapers and stationery received a 10.4 percent increase compared to the previous month.

However, sales of electronics last month fell 13.5 percent as consumers began to avoid major purchases. Hardware, paint and glass were also part of this downtrend, with sales falling 11.3 percent, while sales of clothing and shoes also fell 6.3 percent from May.

However, some sectors continue to enjoy an increasing sales trend.

Bars are up 54.5 percent compared to June 2021, but despite this strong recovery, sales still remain 24 percent below pre-Covid levels in February 2020.

Pharmaceuticals, medical and cosmetics were the only other sectors, along with bars, to post annual growth, with sales up 6.6 percent.

Food, drink and tobacco sales fell 14.6 percent for the year as food inflation rose to 7.7 percent, the highest since August 2008.

Fuel sales fell 10.9 percent from pre-pandemic levels amid rising fuel costs. While the value of fuel sales rose 28.5 percent in the year to June, the quantity sold fell 6.9 percent, reflecting higher prices.

This month, Irish supermarkets saw a 15 percent increase in online spending, according to Kantar. This may have been coupled with a desire to travel less to save fuel.

Online sales in June fell slightly to 4.9 percent from 5.7 percent last month. This was the same as in June 2021 and down from 6.7 percent in June 2020 when some restrictions remained in place.

https://www.independent.ie/business/irish/retail-sales-go-into-reverse-amid-rising-inflation-41874643.html Retail sales are going in the opposite direction amid rising inflation

Fry Electronics Team

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