Weather pours cold water on retail sales in stores and online

SHOPS have seen their sharpest drop in sales in five years and experts are blaming this summer’s variable weather for the slump.

Spending in shops and online dropped over the past year with ‘face-to-face’ expenditure down a massive 3.7% year-on-year, and online was down too but at a slower rate of 0.5% yearon-year, its first decline for 20 months.

The sales figures were compiled by credit card giant Visa, which said: ‘The Consumer Spending Index recorded the first back-to-back fall in household expenditure in June, and the sharpest decline in spending since the series began in September 2014.

‘At -2.6% year-on-year, the rate of contraction was sharper than that seen in May -1.1%.’

But expert Thomas Burke, head of Retail Ireland, said: ‘There’s a consumer softness in terms of sentiment over the last six to eight weeks. We’re hearing that from our members in terms of footfall and spend. The numbers are probspread Priorities: Dermott Jewell ably artificially inflated because it’s a direct comparison with June last year when we had probably an over-performance due to the prolonged spell of really good weather.

‘That drove retail revenues really high, probably artificially high, so the fall looks greater as a result of that.’

The weather in June and July last year was described by Met Eireann as a ‘heat wave, partial drought and absolute drought’. But this year we suffered below average temperatures and wideshowers.

Five of the eight monitored sectors saw spending decrease. Clothing and footwear posted a marked reduction, -5.5%, with sharper contractions registered in both the food and drink, -2.5%, and transport and communication, -3.7%, sectors.

The only three sectors to post increases in spending year-on-year were hotels, restaurants and bars +5.1%, household goods +2.1%, and recreation and culture +1.3%.

Although up, household goods saw its weakest increase in spending in the Index’s fiveyear history.

Face-to-face spending shrank for the second month running in June. Moreover, at -3.7% year-on-year, from -2.8% in May, the rate of decline quickened to the fastest since February.

Online-spending, or eCommerce, also fell last month, the first time since October 2017 although Visa said the 0.5% drop at was ‘marginal’.

Visa’s Ireland manager Philip Konopik said: ‘The latest figures are a cause of concern. The one positive note was the hotels, bars and restaurants sector, which saw the fastest rise last month at +5.1%.’

And Andrew Harker, of IHS Markit which compiles the figures, said: ‘The June figures make for concerning reading, with the rate of decline in spending the sharpest we’ve seen in almost five years.’

Consumers’ Association of Ireland chief Dermott Jewell said: ‘I do consider that we are really seeing a change in priorities in terms of age groups and their spending patterns, with both the younger and the older having more spending power in terms of hotels, restaurants and bars as well as recreational spending.

‘In contrast are the wider group, who would be predominantly family-focussed but which would include parents supporting high rents for grown family members, as well as maintaining, for example, ever-increasing insurances at a time when there is significant concern at affordability in a health system that is not working, and a Government facing challenges that are not being controlled as effectively as they need to be.’

christianmccashin@dailymail.ie

‘Sharpest decline in five years’