July 28, 2020 / 12:06 PM / 15 days ago

UPDATE 1-Irish retail sales up 3.5% year-on-year in June

(Adds detail, analyst quotes)

DUBLIN, July 28 (Reuters) - Irish retail sales rose 3.5% year-on-year in June, the first annual increase since the coronavirus lockdown, as pent-up demand led to large increases in many categories, even as parts of the economy remained closed.

The reopening of all retail in early June and restaurants at the end of the month under one of Europe’s most cautious plans to return to economic normality led to a record 38.4% month-on-month jump in sales volumes.

Annual car sales stabilised, with furniture sales up 25%, hardware up 30% and electrical goods up 14%, data from the Central Statistics Office showed on Tuesday.

With nightclubs and pubs that do not serve food remaining closed until at least next month, bar sales were down 81% year-on-year, while fuel volumes were 18% lower as most employees continued to work from home.

“Given the declines in April and May, a 3.5% increase in sales volumes is actually not a whole lot. With the amount of savings built up, one would have thought the spending growth could have been more than that,” Goodbody Stockbrokers chief economist Dermot O’Leary said.

“There is some pent-up demand there but it still indicates some level of caution towards using those savings and an element of consumers not being able to spend in certain retail outlets, the most prominent being bars.”

Retail sales in June were 3.1% higher than February, before the crisis began, but were still down 21.8% year-on-year for the second quarter as a whole, reflecting the collapse in April and May.

Real-time figures from daily debit/credit card spending to mobility data suggests a further sharp recovery in economic activity in early July followed by a more recent easing, Davy Stockbrokers chief economist Conall MacCoille wrote in a note.

Ireland’s economy was the fastest growing in Europe for most of the last five years before the pandemic struck. (Reporting by Padraic Halpin Editing by Gareth Jones and Nick Macfie)

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