The first estimates of the December Retail Sales Index have just been released by the CSO. The seasonally adjusted series show that December was not a good month for retailers. Here is the index excluding motor trades which make up 8.1% of the December index.
The December falls were the steepest seen since October 2009 and the annual rate of change has once again become firmly rooted in negative territory. Unless there is a major turnaround in the next few months this annual comparison will remain negative as retail sales experience a short-lived “turning the corner” bounce in the first four months of 2010. When compared to these the annual drops in the early months of 2011 could be of the order of 5% or more.
Finally, the monthly changes show that for the volume index December recorded a greater drop than anything over the previous two years. The value index fell but not by the same amount. Is frugality fatigue hitting consumers?
The “road to recovery” is proving to be a little slippery.
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Yes, the figures are abysmal. I'm hoping that it was just the snow and ice which depressed the figures and not anything more fundamental. These figures are far from the turning-corner type ones we were seeing in the second quarter of last year. That really does seem to have been a brief pause in a still downward-sloping trend. It's not surprising really that retail sales are still very weak since peoples' disposable income is being reduced with each and every budget and pay cuts have become the norm in the private sector. However, on a slightly positive note, the rate of decline in retail sales during 2010 was only a tiny fraction of that during 2009. Hopefully Q3 and Q4 this year will see a recovery in this index and we witness a rise in retail sales for 2011.
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