28/09/2011: Retail Sales for August - a nasty surprise.

After showing the signs of some stabilization in quarterly data (Q2 2011 index of retail sales by value was up to 88.3 from 88.0 in Q1 2011 and volume of sales index went up from 91.8 in Q1 to 92.9 in Q2), the latest data has thrown a nasty surprise to the downside in retail sales activity in August.

Here are the core highlights:

• Value of retail sales has fallen 0.8% mom in August to 87.1, down from 87.8 in July. In two months since the end of Q2 2011, the value of retail sales (seasonally adjusted) has declined from 88.7 to 87.1, more than erasing the gains recorded in May and June this year. Annual rate of decline in August was 3.1%, compared to the annual rate of decline of -1% in July.
• August value index posted the sharpest monthly contraction in 4 months, ditto for annual rate of decline. Comparable monthly peak took place in August 2007 and we are now 25.04% down on that in terms of value index. 3mo-MA is now at 87.9, down from the 6mo-MA of 88.0. 2010 annual average for the index was 88.8 and 2011 average to-date 88.0, which means that 3mo- and 6mo- and year-to-date performance through august is worse than 2010 annual average.
• Volume index (seasonally adjusted) also fell, declining from 92.4 in July to 92 in August, the rate of decline of 0.4% mom and 3.6% yoy. This is sharpest rate of contraction (yoy terms) since April 2011.
• 3m0-MA is now at 92.7 against 6mo MA of 92.6 and these are both below 93.3 annual average for 2010. Annual average for 2011 to-date is 92.3.

In summary, folks - the battered sector is taking even more water!

Relative to peak things are even bleaker:

• Value index is now at 73.0% relative to peak down from 73.6% in July. August reading is the lowest since January 2010.
  
• Volume index is at 79.1% of the peak and this is down from 79.45% in July. August reading is the lowest since April 2011.
  

Ex-motors sales:

• Value of retail sales ex-motors in August stood at 94.4, down from 95.2 in July, a decline of 0.9% mom reversing 0.4% mom increase in July, the sales are now down 2.8% yoy against 1.5% decline yoy in July. 3mo-MA at 94.8 and 6mo-MA at 95.5, as well as 2011 average to-date of 95.9 are all below 2010 annual average of 97.6.
  
• Volume of retail sales ex-motors is down to 98.7 in August, 0.5% below the 99.2 reading in July. 3mo-MA of 99.1, 6mo-MA at 99.5 and 2011 average to-date at 100.0 are all below 2010 average of 102.3.

Relative to peak:

• Value of core sales is now at 79.6% of the historical peak having risen to 80.3% of the peak back in July. August reading marks the lowest point in the series relative to peak.
• Volume of core sales is at 84.4 relative to historical peak, also the lowest point in the series.
  

According to CSO:

• Electrical Goods (+2.1%) was the only category that showed year-on-year increases in the volume of retail sales this month. Sales fell in value 5.0% yoy as deflation continued in the sub-sector.
  
• Books, Newspapers and Stationery (-13.3% both in volume and in value), Pharmaceuticals Medical & Cosmetic Articles (-10.4% in volume and -9.8% in value) and Furniture & Lighting (-9.5% in volume and- 13.1% in value) were amongst the categories that showed year-on-year decreases this month.
• Fuel sales have declined 8.2% yoy in volume, but rose 3.1% in value as inflation bit harder into the pockets of consumers cutting back on fuel purchases.
• Hardware, Pains & Glass sales are down -6.3% in volume and -6.8% in value
• Motor trades are down 5.7% yoy in August in value and 2.6% in volume
• Bars sales are down 7.1% in volume and 7.3% in value.

Irish retail sales decline in volume terms was the seventh largest in EU27. Euro area as a whole experienced a decline of 0.2% in the volume of retail sales. More on this in upcoming separate post.