Still no sign of retail sales rebound

[Arbitrager]

Still no sign of retail sales rebound … Thursday, July 29

The pace of the fall in Irish retail sales moderated in the second quarter of the year to 5pc compared to the same period last year but the pace of the decline picked up again on a monthly basis.
That’s according to the latest figures from Retail Excellence Ireland’s (REI) Irish Retail Industry Performance Review Q2 2010 which described the figures as “worrying” with the month-on-month sales decline actually started to rise again in quarter two, reversing a trend of modified decline which had commenced in February and March this year.
Like-for-like sales declined by 2.02pc in April, 4.94pc in May and 5.47pc in June, the figures show.
Jewellery was the strongest performing sector in the industry and the only one to record overall growth of 0.07pc. Footwear also reported improved sales activity with growth of 3.48pc in April and 0.34pc in May. However, this growth was more than wiped out in June with a sales decline of 12.57pc.
As with the past two quarters, Menswear continued to be the worst performing retail sector in terms of sales, reporting a 9.37pc drop compared with the same period in 2009. Although this decline has eased slightly on the 12pc in quarter one this year.
The Grocery sector also continued on its downward trajectory, dropping 7.19pc from Q2 2009 but still less than the 11.60pc recorded in Q1 this year.
Rent cost as a percentage of sales began to modify in Q2 at 12.47pc as opposed to 13.16pc this time last year. Wage cost as a percentage of sales also improved to 15.79pc, compared with 18.43pc in Q2, 2009.
The Average Transaction Value (ATV) continued to decline. It is now E41.92 compared with E47.55 for the same period in 2009 - a fall of 12pc. Sales per square foot also declined.
Speaking at the launch of the Q2 retail figures, REI Chief Executive Officer, David Fitzsimons, said: “Predictions made earlier this year about the imminent return of like-to-like growth in the retail industry may have proved to be overly optimistic. While it would be alarmist to describe the monthly pattern of rising decline as a ‘double-dip’, the figures prove that the market and the industry remain volatile.”
"The good news is that the overall decline in sales activity was an improvement on quarter one. Some sectors actually experienced modest growth, with Jewellery and Footwear both recording sales spurts at various intervals, although this was not consistent throughout the period. The Grocery and Pharmaceutical sectors remained under pressure on the back of aggressive price deflation and weakened sales.
“Other positive findings coming out of the report were the fact that wage cost, and rent cost, as a percentage of sales, both decreased. This proves the point that active intervention in these areas on the part of individual retailers is paying dividends. This same kind of intervention is now required by Government to improve consumer sentiment and reduce property costs,” said Fitzsimons.

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