Retail sales growth continues, but sector still faces threats

Wednesday, 30 March 2016
Retail Ireland, the Ibec group that represents the retail sector, today welcomed the continued growth in retail sales as evidenced by the February sales numbers released by the CSO this morning. Retail sales values, excluding bars and car sales, increased by 4.5% in the year to the end of February, pointing to a strong performance over the early months of 2016. There was also strong volume growth across the retail sector in the year to the end of February, with sales volumes increasing 6.9% in the last 12 months. Retailers however cautioned that this strong momentum should not be taken for granted and that threats to continued growth remain.

Retail Ireland Director Thomas Burke said: “Retail sales are now benefitting from the positive momentum across the economy, although they remain 12.5% below February 2008 levels in value terms. A continuation of this positive trajectory should not be taken for granted. Many retailers are under pressure from a rapidly rising cost base and are concerned about the rate at which input costs are increasing. In recent months we have seen a significant increase in the national minimum wage, double digit rent increases in certain prime retail spaces, and rapidly increasing insurance and other utility costs."

Mr Burke also highlighted concerns amongst retailers at other external threats facing the sector such as the ongoing LUAS dispute: "Retailers have worked hard to ensure customers benefit from the best value, choice and service. However, they can’t control external threats, such as the one posed by the ongoing LUAS dispute. Our members have reported considerable declines in footfall levels in Dublin City centre stores during the days on which industrial action has taken place. If this situation continues the Dublin retail sector will pay a heavy and unacceptable price. This dispute, along with other mooted disputes in key transport networks, only serves to erode consumer confidence and remove shoppers from the city centre."

Mr Burke also expressed disappointment at the decision to postpone plans to introduce a higher frequency, 10 minute DART service because of opposition from drivers. “A higher frequency DART service has a crucial role to play in making the city more accessible and attractive to shoppers. The decision to delay its introduction is a setback for the city's retail sector, which has already been affected by several transport strikes this year.”