The volume of sales in Ireland’s retail sector continues to rise. However, the consumer is still benefitting from price discounting, according to Savills.
The volume of sales in Ireland’s retail sector continues to rise. However, the consumer is still benefitting from price discounting, according to Savills.
In its latest report, Savills analysed the various subsets of the CSO Retail Sales Index and found that, while the volume of sales is up in all categories, prices are falling in almost every area of retail except bars and newsagents.
According to John McCartney, Director of Research at Savills, this trend reflects the highly competitive nature of the Irish retail sector;
“The fact that prices are continuing to fall does not imply that retailers’ viability is being squeezed –lower commodity prices, reduced overheads and efficiency gains have made it possible for shopkeepers to cut prices at the till. However, the fact that they have had to pass these gains on to the consumer confirms just how competitive the retail sector remains.”
However, McCartney confirmed that although prices are still falling, discounting is beginning to ease in many sectors. In particular electrical goods, furniture and fashion retailers are having to cut prices much less steeply than a year ago to drive sales. This may suggest a gradual return of pricing power to retailers as the economy strengthens.
According to Savills, the positive outlook for Ireland’s retail sector has led to a broadly-based increase in the demand for retail space, with both international and indigenous operators – including Aeropostale, Calvin Klein, Hugo Boss, Joules and Jigsaw – all taking space since the start of 2015.
According to Larry Brennan, Retail Director at Savills Ireland, retail development has now become viable in certain locations due to demand;
“We are already seeing new retail development in a number of exiting schemes, such as the recently opened extension at Kildare Village and the Western End at Liffey Valley Shopping Centre. A number of similar projects are now in the planning or pre-construction process; however, it could be some time before we see an all-new shopping centre development in Ireland. In saying that, the demand for retail development sites has clearly increased, and further development is likely to emerge.”