Irish retail industry enters recession

Head of public affairs and communications at Retail Excellence, Lorraine Higgins, says the Irish retail industry has now entered recession.

Ms Higgins bases this on the fact the industry is experiencing a third consecutive quarter of decline, with 15 of 20 sectors recording decreases in sales revenue.

She was speaking following the release of the Grant Thornton Retail Excellence Q1 2017 Retail Productivity Review, which highlights some very negative trading patterns. Most worryingly, the review confirms consumer activity was not as strong as it traditionally would be in most sectors of retail at that time of year.

“Quarter 1, 2017 proved retail is continuing to contract which is in stark contrast to an improving economy and falling unemployment numbers," Ms Higgins said. "The figures for this quarter are most concerning, but the situation is further exacerbated when you consider this is the third period of decline recorded.

“Few sectors performed well, with 15 of 20 sectors recording decreases in sales revenue. January 2017, traded down -1.79 per cent against January 2016, which points to the continued weakness of the January sales due to significant pre-Christmas discount activity commencing with Black Friday.

"March 2017, was a particularly weak month, with sales erosion of -2.64 per cent partially as a result of when Easter fell and also due to accelerated consumer sentiment erosion. Traditionally strong performing sectors at this time of year were adversely impacted in Q1, like footwear (-8.83 per cent ) and childrenswear (-10.15 per cent ).

"Grocery recorded a -3.28 per cent like for like decline in March 2017 with that of 2016, which can also be attributed to Easter falling in April this year.

"On the other hand, the garden sector recorded an 7.34 per cent rise in sales and furniture and flooring was up 3.71 per cent. Overall, 2017 paints a concerning picture as we continue to trend the wrong way."

Ms Higgins says there is a real need for cost curtailment in the Irish retail industry. However, with commercial rents remaining stubbornly high and in some cases rent increases being sought, she says the outlook is bleak.

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