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7 months ago
UPDATE 1-Irish annual retail sales rise on "Black Friday" discounting
January 5, 2017 / 2:49 PM / 7 months ago

UPDATE 1-Irish annual retail sales rise on "Black Friday" discounting

* "Core sales" volumes up 4.9 pct y/y, surpass 2007 peak

* Value of sales 13 pct below peak as price cuts continue

* "Black Friday" pushes electrical goods sales up 13.8 pct (Adds detail on price discounting, analyst comments)

By Padraic Halpin

DUBLIN, Jan 5 (Reuters) - Irish retail sales volumes rose 4.3 percent year-on-year in November, data showed on Thursday, after another round of price cuts around "Black Friday" led to a particularly big jump in the purchase of electrical goods.

Retail sales have grown strongly since Ireland became the fastest growing economy in the euro zone in 2014 but has often come at the cost of heavy discounting in an economy where the annual inflation rate has barely budged in the last four years.

Excluding car sales, volumes were up 3.1 percent month-on-month compared to a rise of 0.9 percent counting the motor trade and stood 4.9 percent higher year-on-year, provisional figures from the Central Statistics Office showed.

That marked the first time in almost 18 months that "core sales" outstripped the headline rate, and saw volumes surpass the previous peak reached in 2007 before the "Celtic Tiger" economy crashed and pushed the country into a bailout from 2010-2013.

However the value of sales are still 13 percent lower than a decade ago and the data for November implied that retail prices were down 1.2 percent on the month and 2.5 percent compared to last year, according to Davy Stockbrokers.

"The pick-up in sales volumes in November seems to point towards a notably increased price sensitivity on the part of Irish consumers," said Austin Hughes, chief economist at KBC Bank Ireland.

"As the monthly pick-up in sales volumes more than compensated for the drop in prices, this strategy seems to have been successful, at least initially. Of course, the November sales jump may reflect spending brought forward from December."

Electrical goods sales, which also rose sharply at the same time in 2015 owing to the growing popularity of "Black Friday" in Ireland, rose 13.8 percent year-and-year, followed by a more than 10 percent increase in the pharmaceutical and cosmetics sector as well as in furniture and lighting.

Industry body Retail Ireland said early trading suggested the sector would struggle to meet its Christmas growth targets, noting the added challenge of the weak pound tempting shoppers over the border to the British province of Northern Ireland.

Hughes said favourable trends in employment and some gains in earnings suggested there would be uneven but still solid gains in 2017.

Merrion Stockbrokers chief economist Austin Hughes predicted that the fall-out from Brexit would see retail sales volume growth soften to between 4 and 5 percent this year, compared to an expansion more than 6 percent in 2016 and 8 percent in 2015. (Editing by Tom Heneghan)

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