Mild weather so far this year boosts Irish retailers
A new report shows that the value of retail sales rose by 4.7% in the first quarter of the year, boosted by a mild winter and early spring weather.
The Retail Monitor, from Retail Ireland – the Ibec group that represents the sector – said there was a “modest uptick” in consumer confidence coming off the back of some respite from Brexit uncertainty.
While the first quarter figures are robust, Retail Ireland stressed that Ireland had been under a blanket of snow and was suffering the disruptive effects of Storm Emma in the first quarter of last year.
The Monitor shows that while sales are up across almost all categories of retail, the trends of discounting and the continuing shift to online are also evident.
This is especially evident in categories such as computers and electrical goods and department stores.
Retail Ireland said the main driver in the supermarkets and convenience stores sector continues to be competitive action with the battle for market share between multiples very intense and the slower but continuing growth of discounters also contributing to downward pressures.
A buoyant economy has been good news for the convenience sector, which is also in growth, it added.
The first quarter represented a solid quarter for the pharmacy sector with strong January sales.
Retail Ireland noted that beauty categories were strong across Valentine’s Day. But seasonal healthcare was soft with the exception of hay fever, which saw an early boost due to milder weather.
It added that the timing of Easter and Mother’s Day was challenging in March, but the quarter remained moderately positive year on year.
Meanwhile, the DIY and hardware sector saw strong growth, helped by the early kick off of the gardening season and this year’s more favourable weather conditions.
But sales of fashion and footwear continue to fluctuate, affected by issues such as increased competition from online UK shopping platforms and changes in the value of sterling.
Retail Ireland also noted that the price of both petrol and diesel at the pumps increased from 137.6 cent and 127.1 cent in April last year respectively to 142.3 cent for petrol and 137 cent for diesel in the first quarter of this year.
Thomas Burke, Director of Retail Ireland, said that after a rocky fourth quarter of 2018, in which trade ebbed and flow almost by the day, retailers will be hoping that a level of consistency to trade can be found in 2019.
Mr Burke said that retail sales patterns in the second half of 2018 were heavily impacted by Brexit related commentary and the extension to the negotiating period until October seems to have calmed nerves somewhat.
“The daily game of brinkmanship is no longer leading news bulletins, and for hard-pressed Irish retailers this is good news,” Mr Burke said.
“On the back of this we have seen an uptick in consumer sentiment as people’s worst fears of a crash out Brexit, have been allayed, at least for the moment,” he added.
Looking ahead, Mr Burke said that many businesses will have budgeted against the performance of Summer 2018.
“For those categories that are particularly reliant on good weather to drive footfall and sales, clearly this will prove challenging. With no guarantee of a similar prolonged spell of fine weather retailers will have to be creative if they are to achieve such heights once more,” he stated.
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