February Retail Sales

Occasionally we get accused of only posting about bad news. I’m not sure that’s fair. The fact is there’s been plenty of bad news to comment on and some of it eye-popping enough to warrant a posts with a bit of additional analysis. That said, yesterday’s release on February retails sales was encouraging, so I thought I’d just point people towards it. After eight quarters in a row of falling retails sales, we seem to be stabilising. Maybe it’s time to have another round of “call the bottom of the recession” given that John the Optimist’s plucky call of a bottoming out last summer doesn’t seem to have worked out.

46 replies on “February Retail Sales”

Back to pessimism,

excluding motor vehicles, retail sales declined (again). So the ‘increase’ is only due to a government incentive to send money abroad.

The tax incentive could have a deflationary effect on the domestic economy as money is spent on imports rather than repairs (employing mechanics) or other discretionary items, like going to restaurants.

@ Ronnie,

you’re right. I should have been more careful. It annoys me that the CSO gives out these year on year changes as the headline, rather than the seasonally adjusted figure.

Year on year sales are down if we exclude motors, but as you said, up 1.2% month on month. The SA figure is also up 1.2%. Hurray. 🙂 Excluding motors, sales volumes were up .4% SA in January. We also had a SA increase last June, and including motoring SA increases throughout last year.

But maybe the weather gives an artificial bounce to the February figures (just to get back to my more comfortable area of negativity 🙁 ).

Yay, good news!

I cant comment on the figures other than to say Im suprised

But its always good to get ‘new’ news particularly when unexpected

There is a similar discussion happening in the States, except that they are looking at first estimates for March.



However, there is also some ancillary evidence in the States (that points in the same direction):

(i) The Thomson Reuters poll: http://www.nytimes.com/2010/04/09/business/economy/09shop.html?fta=y

(ii) Figures from SpendingPulse, an information service of MasterCard Advisors: http://www.nytimes.com/2010/04/07/business/07shop.html?fta=y

Even more encouraging is the fact that it’s the second consecutive month-on-month increases in retail sales volumes (excluding motors). Also interesting is the fact that the value index is up on a monthly basis as well.


1. If the Gov’t is borrowing €400+ per week then that counts as a massive ‘stimulus’.

2. If the gov’t is going to reduce this deficit then that stimulus gets turned off, right?

3. Then what?

If you root around the statistics long enough, take out some category, choose some reference point etc then you are bound to find some good news. Whoop-di-do. Are you trying to make astrology look good?


I thought you would’ve been able to distinguish between the monthly and annual figures!

The retails sales figures are good news but still not sufficient evidence to declare that we’ve “turned the corner”. Motor Trades make up 33.0% of the All Business Index for February, and new car sales being up about 30% on the year have pushed the overall index up.

The March Index gives Motor Trades a 29% weighting. With new car sales continuing to improve and up 78% in March on the same month last year (according to SIMI) we can expect a further good performance in the overall Retail Sales Index for March.

This is borne out by the Exchequer figures with Excise Duty the best performing tax head, only down 1.8% year to date compared to last year. The carbon tax and VRT are helping this. Excise Duty revenues in March were over 12% up on the same month last year.

To get a picture of consumer spending in the overall economy it is better to look at VAT and the retail sales index excluding motor trades. VAT is down 13.0% year to date and the March figure was 12.5% below the same month last year. Retail sales are not as gloomy, down only 3.1% on the year by volume, but 7.4% by value. There is now a clear gap between the value and volume sales indices.

The gap is being driven by the continuing drop in prices. Lower prices drag down revenue on the ad valorem VAT, which also has higher rates on products with higher income elasticities (luxuries). Hence the VAT figures will be worse than the retail sales figures.

Although the annual change in the retail sales index excluding motor trade remains negative, these drops are beginning to unwind. The monthly changes for both the value and volume indices have all been positive in 2010. The value index has risen by 1.3% and 0.1% in each of the first two months of the year and the volume index has risen by 0.4% and 1.3% at the same time.

This gives us a better immediate indication of what it happening. Similar VAT comparisons to support this are meaningless as VAT is paid bi-monthly.

@ Paul McD

I’m not sure you want a serious answer to the question but I’ll take a shot.

Fiscal adjustments to reduce the deficit will certainly restrain economic growth this year. But it probably won’t do so more than last year when, despite the headline deficit exploding, adjustments worth about 5% of GDP were to taken to prevent it from increasing further.

There are other negative factors out there: Mortagage rates already up even prior to any ECB tightening, serious problems with household mortgage debt and banks that are in lousy shape. But potentially offsetting at least some of that stuff is the prospect of some international recovery.

Which of these sets of factors will win out, only time will tell. I’m just saying the retail sales figures have improved, not making any big predictions. The “bottom calling” business above wasn’t intended too seriously.

It seems to me that this site has now arrived at a situation that there is only one type of “news” and that is “bad” news. I get the feeling that certain people here have only one agenda to criticise and moan like the Hurler on the ditch. The first contributor here saw retail sales down when in fact they rose which tells you everything about the mindset here now. Karl I am not sure that there are many “serious” contributors still left here which is sad !!!!!!!

JohntheOptimist has not been commenting lately and I miss him. He has provided a lot of good comments over the last year or so, even if he was a bit early with his call of the business cycle turning point.


Most of the positive economic news until recently has come from Asia e.g. today’s news of Singapore’s annualised GDP growth of 32% in Q1 2010; Tuesday’s Asian Dev Bank Report

It is only in recent weeks that the key US indicators have shown stability and now there confidence of a sustainable recovery – – even though some on business cycle dating committee still have fears of a double-dip recession.

European news has been dominated by Greece and Irish news by the banking crisis.

Monthly sales data for the Eurozone has been volatile in recent months and while the upturn in Ireland is positive for February should be welcome- – it is still only one month.

Irish monthly industrial production data is very volatile because of the dominance of the chemical industry. Ditto for exports and the Live Register has been up and down since last October.

While PMI surveys are showing a strong recovery in European manufacturing, unlike the US, the economic situation is still uncertain.

Apart from key data such as the national accounts, I don’t think it’s particularly useful to open lots of threads on the statistics flow.

Given the backdrop, it’s not surprising that pessimism dominates after a very severe recession but if you want some optimism or a cure for insomnia, check out Government press releases and speeches!

Does anyone know if there was a decrease in retail sales in the north?

I believe there is a chance that value for money in the north might have worsened so some that previously might have gone to the north found the price differential too small, stayed at home and made their purchases in the republic instead.


I agree. People are a bit negative. Ireland is a small open economy. People are encouraged to buy products from abroad as the Irish market is open. That same openness is part of the attraction for inward investment, and the reason so many companies chose to stay here. Of course wages will fall, but so will the cost of living. The cost of living drop will offset the increased taxes somewhat. It’s all relative.

@Micheal Hennigan

‘the economic situation is still uncertain’ – was there ever a time that it wasn’t?

On the substantive point of the post, I agree with Karl that it is good news. Purchasing big ticket items like cars show a degree of confidence on the part of consumers, and that the spending on cars wasn’t simply a substitute for other spending is perhaps surprising, and, if it is not just a one month blip, worth a quiet cheer.

The decrease in the differential in the VAT rates and the small change in the sterling euro exchange rate seems to be making a difference to the return from the Northern Ireland shopping trip – or in other words, the pull of purchasing power parity is operating, even if slowly.

Now what we have to hope for is a faster upturn in the UK and the US than in Germany, so that we can increase exports while maintaining low interest rates.

@karl, thanks. I suppose what I mean is that the Irish economy’s massive deficit financing of the economy has still seen deflation (worst in Europe?) and when that gets turned off things could get much worse. I don’t crunch numbers for a living or even for amusement but with all that debt out there – from Castlebar to California – I cannot see how – even theoretically – we can avoid a prolonged depression in this country…Of course if we get productive then things will be different…but there’s not much substantial sign of that.

@karl, I should have added – surely all these retail sales are being made via borrowed money….on the Fiscal credit card. I suspect that many in your business ( I don’t mean you!!) can be a bit like doctors looking for symptoms in a terminal patient that suggest he’s getting better…..but which are clearly an effect of strong drugs designed to relieve pain. I mean with all the billions being pumped into the West from the bond markets…of course a few more BMWs are going to get sold. That money’s got to go somewhere.

“The first contributor here saw retail sales down when in fact they rose which tells you everything about the mindset here now. ”

Been in retail since 1991. Firstly we never measure sales performance month to month, only versus last year. Most retail businesses are seasonal.

I was in the DIY sector for 15 years- February was always down on January and it will be that way for most retailers. The January sales are over, not much happens in February. I would have been quite happy to see Feb down on January but would want to see it up on last year. In 2010 January was white washed by the snow in the first week which is the busiest week.

Looking at DIY harware on its own, it was up 4% on January (unheard of in my experience) but down 15.5% on February 2009. That’s pretty miserable.

Better to use the 3 months comparisons to smooth out once offs, change in weekends etc. December through February (excluding cars and bars) was 8.8% down on last year in value terms with every sector down.

Also we’re still seeing some serious deflation. Looking at sales excluding cars and bars volume is down 2% on last Feb but value down 6.6%. Good news for the consumer and indeed the gap between North and South must have narrowed. Bad news for the retailer the margin earned is based on value. Expect a few more to go out of business in the near term.

By the way I’m still in retail on my own account so desperately hoping for recovery soon. But it has to be based on solid figures.

Would be interesting to see if retail sales inversely correlate with government visibility.
They’ve all taken a much lower profile recently and the economy is picking up. Lock them away for good and who knows what might happen!!

@ Seamus Coffey

I know, the shame of it.

In my defence however Irish Times journalists are paid to write up such figures so should have higher standards than my carefree posts.

Your negativity is getting me down. You seem to have nothing positive to offer on other people’s analysis…


@ym 🙂 … cribbing and moaning on the sidelines, I wonder why they dont just go and commit… 🙂

I’m sure Brendan O’Connor thought it was all overdone in 2007

At some point the negativity will be overdone; we may be past that we may have some way to go… this piece of data today was a nice suprise and made me think… it can be excused away but facts are facts

I would love to be completely and utterly wrong…. I probably am 🙂 🙂

@ Stuart

The CSO take account of virtually every shortcoming you mention. Just looking at two of these.

1. Seasonal Adjustment – all the reported series are seasonally adjusted based on patterns from January 2000 to the present. The Index itself has different weights for each category in each month to account for seasonal patterns in consumption across categories.

2. Differing number of days or weeks per month. Although produced monthly, the Retail Sales Index is actually a weekly average based on a four or five week period. The CSO had 13 weeks per quarter and divides those weeks between the three months in the quarter. The February index just released was based on a weekly average from five weeks of data.

The nerd in you can read the full details here.

Fools always prefer “good” news. Those who steal from them know this. Honest people know that depressions have rallies. They also know that desperate destocking sales do not promise recovery, but the opposite. Numbers are little tin Gods to some. The difference between data and information is vast! Too much facility in mathematics, at the expense of wisdom?

History trumps “science ” every time. Reread what happened in the runup to the first declaration of a depression!

When was it first called in the thirties and by whom? How long before the glad msm took it up?

Reality intrudes. Get used to it.

@ Margaret Hurley

“‘the economic situation is still uncertain’ – was there ever a time that it wasn’t?”

Maybe in the Republic of Utopia, there is absolute certainty but yes, there have been times when trends – -short or medium term – – were more consistent across major regions of the world than currently.

Economists better or worse than me could have been taken to task on the same score!!

e.g. Galbraith’s “Age of Uncertainty” and Greenspan’s “Age of Turbulence.”

@ All

Private sector economists usually provide useful commentary on key Irish data releases.

e.g as reported here:


Thanks for that, I’m an accounting nerd rather than a stats nerd.

While we looked at the CSO figures for trends our own sales figures were the ones we went on. The headline is Feb 2010 is still down on Feb 2009.

There is economic uncertain “good” and economic uncertain “bad”. In the good things are flying but a prudent business person knows it’s not going to last and builds up reserves, doesn’t make stupid long term commitments. In bad sales are falling, no real sign of an improvement, ominous clouds on the horizon (rising interest rates, another harsh budget in 2010.) In this situation you live off those reserves but you also batten down the hatches, cut costs, reduce inventories. It is a brave person who decides to go on the expansion trail now. It may also be a good time to prudently expand, rents are falling and you could get a cost advantage over competitors. Assuming someone will lend you the money to do it.

In my own business I have a major decision to make in 2 years time, probably less. At the moment there is not enough happening for it to be a positive one. Hopefully that will change.

@ Stuart
I agree that everyone in business has to look at the micro level as to what is happening to their business. I am also self employed and for the first time in some time I am hearing people talking about investing in new capital goods. Simply plant is getting worn out and needs replacing subject to finance. The capital goods suppliers realising there is a lack of finance are coming in to replace the Banks to get sales moving again. Car sales which the cynics here would lead you believe is solely driven by the scrappage scheme are in up real terms.. Why ? Because during 2009 our crap Banks would not lend to 80 – 90% of potential car buyers because they had no money but would not admit it. Now the manufacturers are financing new car sales and the maligned Credit Unions are financing the second hands. If the CSO figures indicate an increase in retail sales for February I do not see the need to analyse to death why those figures are not correct.

As for “Fools” which our Aussie based contributor refers to me as I can only say that this country is surely lucky to be rid of your cynical ilk.


While I wish you success with your business, I cannot see that ‘confidence’ or ‘optimism’ is the answer to our problems. As Pat was hinting, overconfidence and credulousness has led us to this situation. We need harder heads.

Many folk have been hit hard by the bust. The stuff that is coming out is appalling, so emotions are running high. Some of us tend to be a bit outspoken. It’s partly a personal style, but its also a reaction to the fact that we are where we are because others failed to speak up in time about what they knew. If there’s less covering up, the debate will be less tense.

There are huge issues around the viability of a global economic model which is based on ever-expanding consumer credit in the ‘west’ and underpaid labour and savings surpluses in the ‘east’. The fate of of GM and its consumer financing vehicle is instructive. Ireland’s fate is bound up with such processes.

One of the great things about the site is that it has a global reach. Feedback from Australia or anywhere else enriches the debate. We have suffered a lot in the past from the loss of talent which happens with emigration. We are seeing emigration again, and this sort of forum can help to reduce the loss.

Do you want lies or the truth? You are able to speak the truth.

I am cynical. You are well rid of me.

Do not be so afraid of the truth. Consider that you have only so many years left. How do you want to spend them? Use emotion to power your reality, not the lies spread by the msm? The banking engine has been broken again. It is a regular, albeit two generational, happening. You are ignorant of what caused the “Great” Depression? History will enlighten. Check when the history was written. The role of banking has been disguised, for a reason. So it has recurred. You are alive. Act on the facts.

@ Pat

Truth has many faces.

Why so you think we need this site ? Surely it’s to help us to establish what the relevant facts are, and then to work towards some consensus on how to interpret them. As you say, the bog is deep. Without patience, goodwill and co-operation, there’s no hope of getting out of it.

paul Q
Yes. It could also allow folks to prevent it from recurring? I note that some who contribute are further along their path to truth than others. There are many twists to come. Do we keep people in the dark by self censoring? There are many blogs attempting to be all things to all readers.

Worst of all is to pretend that this is a temporary recession with normal economic activity resumed in a month or so. The glad handing rent seekers have an interest in distorting things to make more out of those who take what is in print as gospel.

I will not be a party to it.

@ Pat

I am in favour of transparency, but I recognise the degree to which society and economy depends on complex technical systems. Experts often disagree. Our economic structures have advanced way beyond our capacity to process them politically.

Plutocracy undermines democracy. Powerful individuals and institutions are exploiting the political and regulatory deficit. Competition and predation is part of nature.

So is extinction, so these folk are not all that clever. To the extent that they abuse their insider position, they forfeit political capital. Trust matters. Read Ulrich Beck or Anthony Giddens.

You can concentrate on getting to the top of the tree or you can try to look after the forest. Analysing the economy is one thing, and competing in it is another.

Highly incompatible views can be expressed on this site. Some of the tension is inevitable, in that it arises from standpoint rather than subject matter. Anyone who is up a tree doesn’t really want to hear too much sawing down below !

@ PD: “Worst of all is to pretend that this is a temporary recession with normal economic activity resumed in a month or so.”

Do people not get it Pat? Or, they do, but are so immobilized by the prospect that they dismiss it as impossible (relative to their previous experiences, that is)?

I will assume, unless they inform me otherwise, that those on this blog advocating/promoting/predicting a return to +GDP are a tad badly informed about the fundamental characteristics of a Permagrowyh economy and need to engage in a considerable amount of re-evaluation of their economic Model-in-Use.

Some of you have alluded to ‘negativity’ by some commentators. For myself, I know, with a considerable level of ‘negative’ uncertainty, that our economy is firmly in the ‘negative’ direction – for a considerable time to come.

General Prices are increasing – but money supply, M, is also declining (for the moment): so M/P is … …?. Now what does this mean for interest rates? They are, stable? rising? Looks like the latter. So how to restore that Glorious (self-correcting) General Equilibrium of the mandatory, annual, incremental increase in Y*? Should be interesting.

And before you rush to reply: the global labourforce has increased by almost 3 billion! Supply and Demand? Real wages? Aggregate Supply?
Aggregate Demand? Labour supply and capital stock cannot re-locate to equilibrium – but capital, goods and services can! Think this might be a problem for some economies?

One economy’s production surplus shall be another’s consumption (at equilibrium). But the C seems to have taken a bit of a dive! Hmmmm.

Think Marginal. Increase in aggregate GDP requires an increase in both investment (lower interest rate and credit growth) + mandatory, parallel increase in energy use. Now I know we have a tad of a problem with both credit and energy. MP-credit is now ‘negative’. MP-oil (energy IN v energy OUT) is declining. Think these might have a ‘negative’ affect on GDP growth? Hmmmm.

B Peter


Oh BUGGER! Someone has noticed? The problem with kleptocracy is that they frequently have allies who make out like bandits, until the thefts are noticed …. The yanks (we call ’em septics (sic), here) have been rather clumsy. Their allies may now suffer ….. oh dear.

The USAF is not the same as any other of the US armed forces. They have a very “christian” credo. Incompatible to them means they take it out, if ordered. Whom do they trust? Who adjudicates, when there are the likes of Scalia, Roberts and Thomas sitting as judges?

You have avoided answering my very direct question, posed earlier to you.

Thinking that one is on the inside may be the last mistake that one makes. Transparency and plutocracy are not compatible?

The economic structures are relatively simple. We now must do without banking, for some time to come. We have done that before. There is no complexity in a pyramid scheme!

B Peter

Some are also trying to pretend that things will recover. They have a material interest in that policy. Keeping an appropriate mien while in a crisis is fine, helps save lives etc. Lying to deceive others as their capital is wasted is not a crime, if sufficiently widespread! It is, in certain civil codes, say in France. Not in common law countries.

The overshoot danger is not yet at hand, I suspect. The brains trust on this site cpuld by now have attempted to publicize parameters wherebu we know we are reaching a bottom. Neglecting the IFSC and our FDI program. I am disappointed that no one has yet attempted to do this, despite the awards rightly given to Morgan K et al for warning what was going to happen.

The process will be rough and ready or can be refined but no one is attempting it. Such information would enable those who like me, know and say negative things, to actually point out that a turning point may be close. Hope will soon be a very valuable thing indeed. The deluded, deceiving, whatever, only obscure reality.

@Pat Donnelly – “to actually point out that a turning point may be close. ”

Sorry, I’m not in tune this afternoon. A turning point to what? Recovery? The next dip?

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