The decline in retail sales at the end of last year has caused Retail Excellence Ireland (REI ) to predict that more than 400 retail stores will close during January 2011.
December 2010 was the 34th consecutive month of retail sales industry decline according to the REI which added that the third week in January proved to be the worst week for retail in recent years.
Speaking at the launch of the Q4 retail figures, REI chief executive officer, David Fitzsimons, said: “Concern continues to grow regarding untenable rent and labour costs. A positive which can be drawn from the period is the fact that the like-for-like rate of decline has modified to -3.63 per cent and the level of market volatility continues to modify.”
The adverse weather conditions meant that consumers shopped locally in the latter part of 2010 which severely impacted trading in the main destination shopping centres and cities. At least it was good news for the local retailer who benefited as a result.
As measures contained in Budget 2011 become a reality, disposable income has been greatly reduced. Together with political uncertainty and the upcoming general election, REI does not expect any return to growth and in fact predicts further market decline.
According to REI footwear was the strongest performing sector, recording growth of three per cent. Again the bad weather contributed to this as people purchased weather-appropriate footwear.
Ladieswear was the worst performing retail sector in terms of sales, while the gift and homeware sector also experienced a very challenging quarter.
Pharmacy, menswear, and jewellery all saw like-for-like sales volumes decline by over three per cent in Q4 2010.
REI said that the much anticipated return to growth in Ireland’s retail sector could not now be taken as a given.
“It is clear that the next Government will need to focus on measures to stimulate domestic economic activity,” Mr Fitzsimons said. “The retail industry is the largest employer in the Irish economy and if we are to see jobs growth, there is a strong case for switching more focus on measures that reduce government controlled costs such as rent, rates and Joint Labour Committees and stimulate activity within this industry.”