29/7/2014: Are Irish Retail Sales Getting Better or Growing by Attrition?

Ah, so apparently Irish Retail sales are booming at historically record levels of increases. My view is - Retail Sales are rising, not booming, in Volume of sales and are posting basically shallow rates of increases in Value of sales.

Ok, spot the trends here:

Err...

• Core retail sales by Volume are running below 2010 levels, below peak levels, below short-term trend, albeit the trend is rising. M/M the volumes are up +0.1% - not blistering, right? June reading is only 1.46% ahead of the crisis period average. 3mo average (Q2 average) is 4.5% up y/y - which is good. June reading is 3.6% up y/y which worse than the earlier part of the quarter. 6mo MA is up 3.4% y/y (so that is H1 2014 on H1 2013) - which is good. But sales volumes are still down 36.2% on pre-crisis peak. You do the maths as to when that recovery will get us back to pre-crisis levels of activity.
• Core retail sales by Value (the stuff that pays wages and hires people in the sector) are running along the relatively shallow up ward trend. M/M there is zero change despite weather effects which should have driven sales up. Relative to crisis period average value of sales is down 1.1% in June 2014. Q2 2014 is up 2.6% on Q2 2013, but June 2014 is up 1.94% y/y so again, slowdown in the rate of growth toward the end of the quarter. H1 2014 is up only 1.5% y/y and Q2 2014 value of sales is down 40% on peak.
• Meanwhile, consumer confidence is continuing to run at slightly more moderate rates than previously, albeit still well ahead of where retail sales are.

Year on year growth rates are next:

Things are healthier in H1 2014 than before, but still well below the rates of growth recorded before the crisis. Anyone claiming dramatically higher rates of growth in H1 2014 must be referencing the freakish jump in sales in April 2014. Stripping this out, we are still better off in H1 2014 than in H1 2013, but the rates of growth in 2014 are not exactly dramatic: ex-April average y/y growth in H1 2014 was 0.9% for Value and 2.75% for Volume, comparable figures for H1 2013 were (stripping out that 6mo most volatile month of April) 0.72% and 0.88%, respectively. 

So again, again and again: accelerating growth is present in Volumes sold, but not in Value of sales. If you think that Volumes of sales are creating jobs, increasing retailers' investments and rising sector contribution to the economy, good luck to you.

However, whatever increases in the retail sales might have been, as the chart below shows, we are still far away from getting back to pre-crisis peak levels of retail sector activity:

Now, when you realise that we are into seven years of the retail sales staying below their peak, you have to start wondering if 'getting better' is the same as 'growing by attrition'?..