Car sales a drag on December retail sales

Updated: Monday, 28 Jan 2013 12:12

Figures from the Central Statistics Office show the volume of retail sales fell by 0.1% in December compared with November on the back of weak car sales.

The CSO said there was an annual decrease of 1% - the biggest fall in five months.

However, when motor trades are excluded, the volume of retail sales rose by 0.8% in December from November. There was an annual increase of 0.8%.

Department store sales saw increases of 6.3% last month, with bars sales up 4.4% and books, newspapers and stationary sales rising 3.4%.

The sectors which saw the biggest declines were furniture and lighting, which were down 7.1%, and other retail sales, which fell by 3.1%. The CSO noted that car sales were down 22% in December compared to the same time in 2011.

Today's figures also show that there was no change in the value of retail sales last month when compared with November, while there was an annual decrease of 0.7%.

But when motor trades are excluded, there was a monthly rise of 0.3% in the value of retail sales and an annual increase of 1.1%

Merrion economist Alan McQuaid said that although the December numbers were a bit of a let-down, the overall performance in the fourth quarter was positive. He suggested that the fall in personal expenditure in goods and services for 2012 as a whole and the drag on national output will not be as weak as originally thought.

He said that consumers currently remain ''very picky'' and are spending mainly on things that appeal to them.

Despite the economic and fiscal headwinds, retail sales performed relatively strongly in the second half of last year, with core retail sales now in positive territory on an annual basis in both volume and value terms for five successive months, NCB economist Emmet Gaffney noted.

''That the positive underlying trend in core retail sales remained intact in December tallies with positive noises from the industry regarding trading over the Christmas period,'' he added.

''The annual increase in December 2012 against December 2011 is a welcome development especially in a month where a significant proportion of a retailers annual turnover is transacted'', commented Excellent Retail Ireland's David Fitzsimons.

But he said the figure does hide the fact that many retailers entered sale pre-Christmas, thus while turnover were marginally up, margin is most certainly down.

''We are also very concerned for a number of retail sectors which continue to struggle including those reliant on a functioning residential housing market. Retail closures announced in recent weeks prove the distressed nature of the industry and we call on landlords to take a common sense approach to rent levels,'' he added.