Sales of clothing and footwear rose by 3.5% last month, but overall retail sales slow
The volume of retail sales declined by 1.5% in February compared to January, new figures from the Central Statistics Office show today as sales of cars and electrical goods slowed.
On an annual basis, however, retail sales were 5% higher in February compared to the same month last year.
The CSO said that when volatile motor sales are excluded, retail sales fell by 0.4% in February from January and were up 2.3% on an annual basis.
Breaking down the sectors, the figures show that sales of clothing, footwear and textiles rose by 3.5% while fuel was up 1.4% last month.
But sales of cars and vehicles fell by 5.7%, while electrical goods sales slowed by 2% and food, beverages and tobacco sales were down 1.9%.
In January, retail sales had risen by 1.9% on a monthly basis and by 9.4% on a yearly basis.
Commenting on today’s figures, Merrion economist Alan McQuaid said that consumer sentiment hit its highest level since May 2007 in February and there are signs that this is now being reflected in stronger personal spending.
“The main factor impacting negatively on consumer demand has been the continued net decline in real disposable incomes, an increasing tax burden and an erosion of transfer income. As well as that, the personal savings rate has remained elevated as households have striven to reduce their high level of indebtedness and to adjust to a sharp fall in personal wealth,” Mr McQuaid said.
Investec economist Philip O’Sullivan said that while he takes comfort from the broad-based pick-up in retail sales volumes, he noted that discounting remains a potent factor – a sign that the domestic economic recovery remains somewhat fragile.
But he said that “for 2014 as a whole we see an upturn in consumer spending, aided by continued growth in payrolls and the surge in consumer confidence.