Published on 23 - April - 2012
Poor furniture and flooring sales drive down Irish retail in Q1Ireland's retail industry suffered its 12th consecutive quarter of declining sales during its 2012 Q1 trading period, but there was some light at the end of the tunnel as retail sales for March recorded a like-for-like increase of 0.73%.
The REI are calling on NAMA to improve response to troubled retailers with upward-only leases
The figures were produced by Retail Excellence Ireland (REI), which pointed out the boost was just the second year-on-year increase seen since 2008. Overall sales levels fell by an average of -2.56% year-on-year for the quarter, a decline from the 2011 Q4 sales drop of -1.58%.
Furniture and flooring was pinpointed as the worst-performing retail sector, down -9.83% since Q1 2011. The REI said the category "continues to be affected by consumers holding off on the purchase of large ticket items" as well as "the erosion of average price as competitors liquidate stock to generate cash flow." Homewares also did worse than expected, with LfL sales falling by -3.92%.
January was isolated as the worst of the three months, with sales falling by -4.72% compared with January 2011. February did better, with Irish retailers reporting a fall of only -1.68%.
The only sectors to report growth during the period according to the REI were hot beverages and pharmacy, up 1.36% and 1.61% respectively.
REI chief executive David Fitzsimons said: "Having experienced marginal like-for-like growth in December 2011 the Irish retail industry returned to declines in January and February 2012, in some part due to postponed spending being expressed in January and February 2011 following the white Christmas of 2010.
"March 2012 returned to like for like growth helped by a spell of good weather. The big ticket discretionary sectors remain in greatest distress borne out by a disappointing -9.83% Q1 decline in sales recorded in the furniture and flooring sector.
"The hot beverage sector growth recorded of 1.36% indicates that consumers are still active however they remain cautious and seek out value at every turn. While both the premium and value ends of the market are performing reasonably, the middle market remains highly competitive with further failure anticipated."
Mr Fitzsimons pointed out that the 2% VAT increase to 23% had made retailing "difficult" when faced with meeting last year's targets.
"Constant negative media commentary surrounding household charges and water charges is worsening consumer sentiment," he added.
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