Jan 28 (Reuters) – Irish retail sales fell 1 percent in December, their sharpest annualised fall in five months, as weak car sales dashed hopes of a Christmas boost to the struggling economy.
The weak festive period highlights the country’s dependence on exports by multinationals to provide economic growth as high unemployment and austerity weigh on the domestic economy.
“It doesn’t augur well for 2013,” said Alan McQuaid, chief economist at Merrion Stockbrokers. “It looks like another tough year ahead and the main driver will again by exports rather than domestic demand.”
If car sales, which fell 22 percent, are stripped out, sales volumes were up by a modest 0.8 percent on a year earlier.
A hike in car sales in December 2011 as people avoided a year-end value-added tax hike appears to have contributed to the relative weakness a year later.
Strong sales at department stores, which were up 6.5 percent on the year, and electrical goods up 4.1 percent prompted some retailers to predict one of the best Christmas period’s in years.
But other areas proved weak including furniture, down 10.5 percent on the year, and clothes which saw volumes fall 2.6 percent.
Retail sales were 1.1 percent down over the whole year compared to 2011, in line with the average forecast of economists polled by Reuters .
“This is a poor outcome given anecdotal evidence of aggressive discounting by retailers through December,” said Conall MacCoille, Chief Economist at Davy Stockbrokers.
“Excluding the exceptionally weak 2010, December’s retail sales volume figures were the worst since 2002,” he said.
Retail volumes were adjusted up to 1.2 percent month-on-month in November from a provisional reading of 1.1 percent. They fell 0.2 percent on an annualised basis in November, compared to a provisional estimate of a 0.5 percent fall.