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Further retail recovery in 2015 predicted

Retail Ireland, the Ibec group that represents the retail sector, today published its Q1 Retail Monitor, with key indicators pointing to further improvements in the sector’s performance this year. This follows positive trends during 2014 and a Christmas trading period up on 2013. Strong January VAT returns, which were €225 million or 12.9% ahead of last year, suggest the recovery is starting to gain traction.

The sector is still operating at levels far below that reached during the boom years. Turnover is down nearly 20%; employment in the sector has fallen by 44,000; and 3,500 retail units closed during the recession. Many businesses are still constrained by boom time costs and charges.

Ibec estimates consumer spending will rise by 2.7% in 2015, following growth of 1.3% last year. Key factors supporting further recovery over the coming months include an expected rise of 55,000 in the numbers at work, and a rise of 3.5% – 4% in disposable income. The dramatic fall in oil prices will also boost consumer spending power. Every $10 fall in the price of a barrel of oil translates into an additional €100 million spending power for Irish consumers.

Consumers look set to benefit from yet another year of low inflation, with intense competition keeping prices down. The group estimates overall inflation in the economy to be 0.4% this year. At present, goods inflation is at minus 2% annually as shops battle for footfall.

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