Retail Ireland Monitor

Transcription

1 Issue 1 February 2015 Retail Ireland Monitor Christmas trading boosts retail s recovery The CSO s retail sales statistics for the all-important month of December returned positive, albeit modest, growth, matching Retail Ireland s predictions in our Christmas Retail Monitor. With the pre- and post- Christmas trading period the most crucial time of the year for retail, December saw a particularly strong performance in department stores and across furniture, lighting and homewares outlets. The total value of December s sales rose by 1.8 on an annual basis, with volumes jumping by 5.2, indicating that discounting remains a significant factor in driving footfall and sales. Overall figures for 2014 mark the first full year of growth since the recession, providing clear indication that a turning point has finally been reached after a number of very challenging years for the sector. That said, recent gains come from a much reduced base. Growth remains frustratingly slow with the total value of sales still 17 below peak levels in 2008-Q1. Meanwhile, legacy business costs, exorbitant rents and unrealistic commercial rates continue to pose significant challenges for many operators. With thousands more in employment, a rise in disposable incomes and a much improved level of consumer confidence, retailers can look forward to 2015 with a sense of cautious optimism. While the rate of recovery has been slow during 2014 there is now real hope that the pace of recovery will increase during Retail sales in Ireland by value December change Nov 14 Dec 13 Supermarkets and convenience stores Department stores Specialised food and drinks stores (grocers, butchers, fish mongers, off-licences, bakeries, etc.) Fuel (including petrol and diesel) Pharmacies (including medicines, beauty and cosmetics) Fashion, footwear and textiles stores Furniture, lighting and homewares stores DIY and hardware stores Computers, electrical and electronics stores Books, newspapers and stationery stores Other non-food specialised stores (music, toys, garden centres, sports, jewellers, etc.) All retail sales (excluding motor sales and bars) Editors Notes: Data collated by Central Statistics Office Based on latest available official retail sales data for December 2014 Results are weighted by turnover All major retailers obliged to provide data by law Weighted sample of smaller retailers

2 Retail sales in Ireland by volume December change Nov 14 Dec 13 Supermarkets and convenience stores Department stores Specialised food and drinks stores (grocers, butchers, fish mongers, off-licences, bakeries, etc.) Fuel (including petrol and diesel) Pharmacies (including medicines, beauty and cosmetics) Fashion, footwear and textiles stores Furniture, lighting and homewares stores DIY and hardware stores Computers, electrical and electronics stores Books, newspapers and stationery stores Other non-food specialised stores (music, toys, garden centres, sports, jewellers, etc.) All retail sales (excluding motor sales and bars) Positive end to a healthier retail year Total value of December s sales edges up 1.8, but discounting remains a feature with volumes jumping 5.2 Challenges remain, with total sales values still 17 below 2008 s peak

3 Modest gains for supermarkets and convenience Despite intense competition and aggressive discounting, it was a generally satisfactory Christmas for supermarkets, although its timing on a Thursday seems to have delayed the peak trading days until immediately before the holiday. Meanwhile, Q4 saw convenience continuing to benefit from the strengthening economy s improved trading conditions. The greater Dublin area continues to record the strongest recovery, with regional locations lagging behind. A more robust Christmas for department stores Despite a disappointing October and November, sales accelerated in the first two weeks of December, followed by a slightly more subdued third week. Last minute shoppers helped to ensure that the week immediately before Christmas was very strong, as was the post-christmas sales period. Almost all in-store categories returned growth, with jewellery, women's accessories, beauty, furniture and homewares performing particularly well. Price falls impacting service stations Sales of unleaded petrol have been declining for some time as consumers switch to more fuelefficient vehicles, which, coupled with increased economic activity, continues to drive significant growth in diesel sales. Meanwhile, petroleum product costs continue to fall, resulting in average prices at the pump declining by 0.21 for unleaded petrol and 0.18 for diesel during Q4 alone.

4 Pharmacies continue to see impact of Government action on drug costs Although prescription volumes were up marginally, values continue to suffer as a result of changes in the cost of drugs. Meanwhile, Christmas purchases pushed up sales of cosmetics, skincare and beauty, with healthcare products boosted by increased instances of coughs and colds versus last winter. Indications are that the post-christmas sales period was particularly strong. Mixed fortunes for fashion, footwear and textiles The unseasonably mild weather impacted women s fashions with the sale of coats and winter boots down considerably. The opposite appears true for menswear, which enjoyed a more successful Q4. A very strong Black Friday weekend resulted in a slower than expected start to Christmas trading, with the upsurge coming later and peaking during the post-christmas sales. Furniture and products for the home continue to soar In tandem with a surge in the property market, furniture sales have enjoyed a bumper Although new orders dipped somewhat in Q4, indications are that they recovered strongly in the run up to Christmas and even more so during the post-christmas sales. Without doubt the year s strongest performing category, indications are that furniture will continue to lead retail s recovery.

5 Retail DIY still not seeing impact of recovery in property With modest growth reported throughout the final quarter, a buoyant Christmas season resulted in less discounting of excess stocks at the end of the season. With the paint sector stable, evidence suggests that increased repair, maintenance and improvement activity has yet to impact the retail DIY arena. Meanwhile, a mild November held back the hardware sector somewhat, affecting insulation and heating sales in particular. Healthier quarter for home electronics Mirroring gains in furniture and further illustrating the rebound in the property market, electronics, electrical and computers saw a stronger end to the year, with values up 3.9 during December. Once again, intense competition from global e-retailers, heavy discounting and the falling price of personal devices and home computing in particular means that sales volumes (at +9.8) continue to significantly outstrip value performance. Books and newspapers continue their struggle against the online threat The greater volume decline reflects the on-going migration of books, news and magazines to online and digital formats, with the less severe drop in value attributable to price increases across these categories caused by the growing strength of sterling. Within children s literature, general fiction and biographies proved the most popular titles in the run-up to Christmas. Meanwhile, stationery sales proved somewhat more robust with traditional seasonal items like calendars and diaries performing well.

6 Consumer prices remain largely steady On average, Irish consumer prices were 0.3 lower in December 2014 when compared with December Among the retail-specific categories, books (+6.4), cigarettes (+5.4), fashion accessories +3.8), newspapers (+2.6) and wine (+2.0) returned the largest increase in average prices, whilst computers (-12.7), cameras (-10.4), diesel (-9.6), home entertainment (-9.3) and sports equipment (-9.0) recorded the sharpest falls. UK retail volumes see Q4 gains November s data for UK retail sales recorded a jump of 6.4 in volume terms compared with November This was the highest monthly year-on-year increase since May 2004 and provides further evidence of our nearest neighbour s strengthening retail market. Euro significantly weakens against dollar In recent weeks the dollar has strengthened considerably with the euro ending Q4 at just above $1.21, with very welcome implications for inbound tourism. Meanwhile, quantitative easing has also affected the euro s strength against sterling, with the value of a Euro closing 2014 at 0.78 and resting at 0.75 by the end of January This trend is likely to continue into 2015 as more euro floods the market as a result of the recent shift in ECB fiscal policy.

7