Irish Retail Spending Slows Following Brexit Vote

Retail sales growth in Ireland have slowed down following the Brexit vote, according to latest figures from industry body Retail Ireland.

Overall sales were up 2.8% in value terms for the January-June period, but Retail Ireland said this growth has tapered off following the 23 June vote. Amongst other figures, it noted that sales of books and magazines sales rose by just 4.2%, compared to 7.7% growth at the end of March.

Thomas Burke, Director of Retail Ireland, said that the continuation of this trend could severely impact the sector.  He noted: “We’ve come through six or eight years of very difficult times for the Irish retail sector and for Irish consumers indeed, and the Irish consumer has been scarred by that experience.  Any sign of uncertainty now, we see that quite quickly reflected at the tills, anything which causes the consumer to question the purchase is definitely a concern.”

Retail Ireland also called on the Irish government to lower taxes and increase public spending in the next budget.  It warned that any extra costs on businesses and employment, such as a higher minimum wage, would further dent the retail sector.  In addition, it said the government should establish a ‘town centre’ fund, which would provide financing for local businesses in towns and villages across Ireland.

NAM Implications: 
  • The other factor will be an inevitable increase in cross border traffic as consumers take advantage of the falling pound…
  • The main issue will be the extent to which exports to the UK are driven down by the exchange rate…
  • With the overall question being: How long…?
  • Meanwhile, pragmatists will budget for at least 5 years, given no foreseeable change in the fundamentals…