Wednesday, 26 December 2018Retail Ireland, the Ibec group that represents the retail sector, today said that the next few days would be crucial in determining if Christmas 2018 would meet earlier positive expectations.
Earlier this year the group had indicated a rise in consumer spending in the region of 3 per cent over the Christmas period. Should this growth be achieved, it would significantly boost sales, by over €150 million this December. But the latest feedback from retailers suggests that a strong performance in the post-Christmas sales period would be needed if the sector was to achieve those levels before the end of the year.
Director of Retail Ireland, Thomas Burke, said: "2018 has been an up and down year for Irish retail and one characterised by a series of peaks and troughs in trading. The sector is still hopeful that growth targets can be realised, but trading conditions have been challenging. Trade in the early part of the year was severely disrupted by heavy snowfall while conversely the long, hot dry Summer brought bumpers sales for some categories of retail. It would appear that this trend has continued into the Christmas period where despite growing levels of consumer disposable income and almost full employment some categories of retail have found trading conditions tough.
"This inconsistency in trading levels has necessitated heavy price discounting and promotional activity in recent weeks with pre-Christmas sales starting on Black Friday now seemingly the norm in the sector. Promotional activity will grow further as we enter the traditional post-Christmas sales period.
“Retailers have also been impacted by bad weather as storms and inclement weather hit during vital shopping weekends in the run up to Christmas Day itself. Footfall on these weekends was down significantly on comparable weekends in previous years. In addition, while continued sterling weakness has brought pressure for border retailers and moved a considerable amount of purchasing online, Irish retailers are reporting strong performances in their online stores this year. With strong double-digit growth expected, this is now the fastest growing channel for Irish retailers.
“Increased disposable income (up over 10 per cent since January 2017) and a growing number of people in work (a record level of 2.27 million), means it is a great time to be an Irish shopper. Allied to this, goods prices are now down almost 10% since 2013, as competition between retailers has driven prices back to Christmas 1999 levels. Retailers are hoping this will entice more consumer spend and translate into valuable sales in the coming days.”
Particular trends highlighted by various retailers this Christmas include:
· Intense competition in the grocery sector with consumers benefitting from deep discounting on a variety of ranges as supermarkets battle for footfall
· Sales in fashion and footwear has been heavily impacted by unseasonably mild weather in recent weeks
· Retailers reporting a late surge in sales with a particular pick up in the last 5 days of trading with last weekend particularly busy
· Irish retailers reporting a strong performance in their online stores this Christmas, with the sector on track for to achieve record online sales
· Border retailers under pressure in recent weeks as weakness in Sterling persists
· Extension of Black Friday sales to cover most of the pre-Christmas period has distorted trade