Ibec group Retail Ireland has said that the retail sector is struggling to meet Christmas sales expectations.
Robust post-Christmas revenue before the end of the year will be essential in achieving Christmas 2016's previous positive outlook.
The group had predicted an increase of roughly 2.5% over the holiday period, resulting in boosted sales of €160 million in December.
Director Thomas Burke said, "The sector is struggling to meet growth targets due to challenging trading conditions," despite consumers possessing more disposable income (+1.5% in the first half of 2015) and more people being employed this festive season (up 2.9% on Christmas 2015).
Only furniture and homeware lines have enjoyed strong performances this December.
Intense competition in the grocery sector, unseasonable weather, the extension of Black Friday sales, and UK competition have all contributed to the revenue shortfall.
Retailers have been cutting prices to keep with the trend of pre-Christmas sales, and the weakness of the pound has led to price drops on items from the UK.
A precipitous price drop of 3% in the last year has brought costs back to Christmas 2000 levels.
Burke stated, "2016 has been the proverbial tale of two halves for Irish retailers. While the first six months of the year saw sustained growth in the sector, the midpoint of the year marked a significant slowdown in this growth trajectory. Unfortunately, it would appear that this trend has continued into the Christmas period."
Two extra shopping days this week will hopefully help retailers reach pre-Christmas forecasts.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. To subscribe to ESM: The European Supermarket Magazine, click here.
