The Irish retail economy is booming according to a raft of newly released data from the Central Statistics Office. Today’s Institutional Sector Accounts show that Irish households’ disposable incomes rose by 6.2% - or almost €1.5bn - between Q1 2015 and Q1 2016.

According to Dr. John McCartney, Director of Research at property consultants Savills, this reflects improvements in both the jobs markets and the public finances.

“47,000 more people are now earning a wage than last year. And those that already had jobs are now earning more on average. These factors, combined with modest tax cuts, have led to a sizeable uplift in disposable incomes.”

Critically, while €210m of the increase in household incomes has gone into savings, the majority has been spent – total expenditure by households in Ireland rose by 6% or €1.27bn in the last year.

The spending surge is reflected in the June retail sales figures – also out today – which show that sales are up 5.3% in real terms over the last 12 months. The biggest year-on-year uplift was in car sales which rose by 13.6%. But sales growth was also strong in other big-ticket items like furniture (+9.4%) and electrical goods (8.6%).

European Championship Finals

McCartney noted that some sectors may have gained a temporary uplift from Ireland’s participation in the European Championship Finals which took place in June.

“We have seen before that television sales in the run up to big sporting occasions can drive turnover in electrical goods stores. Bar sales were also notably stronger, with a 9.6% increase compared with June 2015, and this is consistent with large numbers of people congregating in pubs to watch the matches.”

Retail Jobs Growth

However, Savills notes that the pick-up in retail sales generally, and food & beverage sales particularly, has been ongoing for some time and has led to retailers in these sectors expanding aggressively.

“Amazingly, of the 47,000 new jobs created in the last year, 11,700 have been in the retail sector and 10,200 have been in the food & beverage sector. Together these sectors accounted for 47% of net additional jobs in the Irish economy”.

Savills says that the expansion of these sectors has created very strong demand for restaurant properties and bars.