Thursday, 8 October 2015
In advance of today's Retail Ireland Summit 2015, Retail Ireland, the Ibec group that represents the sector, released new consumer spending projections for the year and predicted the best performing Christmas in seven years for Irish retailers. Expected tax cuts in next week’s budget should help raise consumer mood and boost spending just in time for the crucial Christmas trading period.
Tomorrow's Retail Ireland Summit 2015, entitled 'What's in store?', brings together over 200 senior retail executives to discuss the latest innovations and new thinking on the future of retail (see full details below). The event at the Guinness Storehouse will address challenges and opportunities in the digital age and the future of consumerism. The key note speaker is Doug Stephens, one of the world's foremost experts on consumer trends. The event is proudly supported by primary sponsor MasterCard and Communications partner Vodafone.
Retail Ireland said it now expected core retail sales for December 2015 to reach €4.05 billion, up by 3.5% over 2014. This new projection comes after a steady recovery over the year to date, following a torrid few crisis years, characterised by collapsing sales, store closures and job losses. Consumer confidence remains high and indications are that Budget 2016 will again put more money back into consumer pockets.
Strengthening momentum means that consumer spending growth will top 3.1% in the full year of 2015 versus last year, out-performing previous Retail Ireland estimates. Despite these positive figures retail sales this Christmas are still expected to be 12.2% (€550 million or €330 per household) down on 2007 levels. The fact that sales this Christmas will only be up 3.5% on the level of retail sales of Christmas a decade ago in value terms, despite rising costs and legacy debts, underlines the last decades status as a lost decade for the sector,
Data for the first eight months of the year show solid growth across many retail categories. Despite the weak euro’s pressure on margins, retail’s recovery continues to be dominated by furniture and home accessories outlets and computers and electronics operators (+9.6% and +5.8% respective value growth to the end of August, versus 2014), indicative of increased activity in the property market and a release of pent up demand for home improvements, whilst fashion and footwear stores, always a key barometer of consumer confidence, saw combined values rise by 5.8% in the year to the end of August, led by men’s apparel and women’s accessories. Meanwhile, the country’s leading department stores have indicated much improved trading, with sales of mid-market and luxury brands soaring, boosted by record tourism.
Illustrating the importance of the Christmas sales period in fostering retail’s recovery, Retail Ireland estimates that personal consumption expenditure on core retail goods during December will be equivalent to about €2,450 per household, approximately €600 more spending per household than in any other month of the year.
Director of Retail Ireland Thomas Burke said: "The fortunes of Irish retailers are finally on the up. Positive trends during the year and a budget that will put money back into the economy create a positive backdrop as we enter the crucial Christmas trading period. It is vital that we maximise the benefits of the recovering economy by reducing income tax and making it more attractive for employers to take on new staff. The marginal rate of tax is still way out of line internationally and should be reduced over the coming years. Any reduction should not be funded through increases in other taxes such as excise duties or VAT."
Speaking before the event, Chairperson of Retail Ireland and Managing Director of Eason, Conor Whelan, said: "During the recession sales fell by 24% and many iconic retail stores closed. We are now emerging from that downturn and there is cause for optimism. Retail is labour intensive and has the ability to create thousands of quality jobs over the coming years. Getting the business environment right is vital. Legacy debts, unsustainable boom time rents and spiralling operating costs all continue to present a threat to a sustained recovery in the sector and demand ongoing attention."
Summit sponsors Mastercard said it shares Retail Ireland's positive outlook. Jason Lalor, MasterCard General Manager in Ireland said: "With the retail sector in Ireland on the up, to sustain this momentum retailers need to continue to create more valuable shopping experiences for their customers. As Irish consumers shopping habits become more diverse and complex across in-store, online and mobile channels, there is a significant opportunity for retailers to build out their e-commerce offering and embrace emerging payment technologies. MasterCard has the experience and know-how to help retailers develop their capabilities online and ensure they can take payments safely, securely and conveniently and make the most of the Christmas rush to come!”