Clear signs of confidence returning to consumers following the recession
The retail sector is showing signs of a sustained recovery for the first time since the crash, but the industry is still rife with problems, a trade group has warned.
In its report on the state of the sector between April and June this year, Retail Ireland said there were clear signs that a “change in mindset [among consumers] does appear to have taken hold this year”.
“Consumers appear more confident, with recent indicators putting consumer confidence at a 12-year high,” said the agency, which is a division of employers’ group Ibec.
While sales rose by 2.3pc in the year to the end of June, Retail Ireland said there was still a long way to go.
The group pointed to the fact that sales were still as much as 14pc off the highs of the Celtic Tiger years.
While it believes that a full recovery is “still some way off”, the boom year numbers were boosted to unrealistic levels by a credit-fuelled binge.
Spending so much on credit is now widely recognised as being unsustainable in the long run, so it is questionable whether the industry should even expect to attain the previous peaks of the boom.
Retail Ireland also pointed to the loss of some high-profile retail businesses during the year so far as evidence of the ongoing weakness in the sector.
The report points to a number of high-profile examinerships.
The department store sector had the strongest performance, with volumes increasing 7.8pc in the second quarter of the year.
In contrast, the furniture sector saw a significant drop off in performance in May and June after what had been a strong 12 months.
Computer sales volumes rose 9.4pc in Q2, though much of that growth was as a result of discounting, Retail Ireland said.
To help the sector recover, Retail Ireland director Thomas Burke is calling on the Government bring in a number of measures in October’s Budget.
He wants the Government to reduce income tax by 1pc and reinstate the reduced employer PRSI rate of 4.25pc, which the group said would encourage companies to take on new staff.
It also wants more government support for retailers who want to start selling online.
And it wants a new pilot scheme to help support and regenerate town centres across the country that have been ravaged by the crash.
“A full recovery is a long way off. Future success is contingent on the Government making the right budgetary and policy decisions now,” said Mr Burke.
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