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Retail sales up 4.5% in October compared with last year

The volume of retail sales was up 4.5% in October compared with the same period last year, but was flat compared with September, the latest figures from the Central Statistics Office show.

If motor trades are excluded, there was a decrease of 0.3% in the volume of retail sales in October compared with September, and there was an increase of 6% in the annual figure.

The sectors with the largest monthly volume increases were pharmaceuticals, medical and cosmetic articles (7.3%); fuel (1.3%); and clothing, footwear and textiles (1.3%).

The sectors with the largest month-on-month volume decreases were books, newspapers and stationery (-2.5%); electrical goods (-2.1%); and other retail sales (-2.1%).

There was a decrease of 0.1% in the value of retail sales in October compared with September and there was an annual increase of 2.5% compared with October last year.

If motor trades are excluded, there was a decrease of 0.3% on the month and an increase of 3.7% in the annual figure.

An analyst with Davy said the data showed “something of a pause in growth” last month, but that the outlook “remains positive” with employment and wages continuing to grow strongly.

Merrion economist Alan McQuaid said retail sales “remain erratic” on a monthly basis, but that the underlying trend is “positive”.

“While most attention has been on new car sales in the past couple of years, which will be lower in 2017 than 2016, personal spending in other areas has picked up over the same period and is becoming more broad-based,” he said.

“Despite the fluctuation in consumer sentiment since the start of last year, overall personal spending was quite robust in 2016, with headline sales up 6.7% on average in volume terms, albeit lower than the 9.5% rise posted in 2015.”

Weakness

Mr McQuaid said that even allowing for the weakness in sterling since last year’s Brexit referendum, which has enticed some shoppers to spend in Northern Ireland, retail sales in the Republic “have held up quite well”.

“Indeed, VAT receipts for the year to date are running ahead of official Department of Finance expectations,” he said.

“However, with the pound still very weak in relative terms, the worry for retailers is that more and more shoppers will head North between now and year-end, especially for the busy Christmas period.

“Still, personal spending growth is expected to be positive again in 2017, boosted by the continued fall in unemployment, but with the overall increase in headline sales likely to be lower than last year.

“Taking all the factors into account, we are now forecasting headline retail sales volume growth of around 3.5% in 2017.”

Article in the Irish Times