REI Irish Retail Industry
Productivity Review Q1 2012
TABLE OF CONTENTS
Q1 2012
INTRODUCTION:
3
Like for Like Sales Q1 2012 vs Q1 2011
4
Footwear Sales - Q1 2012
5
Furniture & Flooring Sales - Q1 2012
The Retail Excellence Ireland Quarterly Productivity Review provides
the most in-depth retail industry and sectoral analysis available today.
The Review monitors overall industry performance, sectoral
performance, average transaction value data, retail space
productivity and labour and rent cost ratio analysis. The Review
aggregates and analyses data from over 3,500 retail stores in Ireland.
6
Garden Centre Sales - Q1 2012
COPYRIGHT:
7
Gift & Homeware Sales - Q1 2012
8
Grocery Sales - Q1 2012
9
Hot Beverage Sales - Q1 2012
10
Jewellery Sales - Q1 2012
11
Ladies Fashion Sales - Q1 2012
12
Menswear Sales - Q1 2012
13
Pharmacy Sales - Q1 2012
14
Average Transaction Values (ATV) / Sales per Sq Foot - Q1 2012
15
Wage Cost as Percentage of Sales - Q1 2012
16
Rent Cost as Percentage of Sales - Q1 2012
REI Irish Retail Industry Productivity Review Q1 2012
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organisations or individuals without the express agreement of Retail
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members of Retail Excellence Ireland, and cannot be reproduced
without the prior written permission of Retail Excellence Ireland.
DISCLAIMER:
Although every effort has been made to ensure the accuracy of the
material contained in this document, complete accuracy cannot be
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any responsibility whatsoever for loss or damage occasioned or
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of any person acting or refraining from acting, as a result of a matter
contained in this document.
Retail Industry Like for Like Sales Q1 2012
REI Chief Executive David Fitzsimons comments:
“Having experienced marginal like for like growth in December 2011 the Irish Retail industry returned to declines in January and February 2012, in some
part due to postponed spending being expressed in January and February 2011 following the white Christmas of 2010. March 2012 returned to like for
like growth helped by a spell of good weather. The big ticket discretionary sectors remain in greatest distress borne out by a disappointing
-9.83% Q1 decline in sales recorded in the Furniture and Flooring sector. The Hot Beverage sector growth recorded of 1.36% indicates that consumers
are still active however they remain cautious and seek out value at every turn. While both the premium and value ends of the market are performing
reasonably, the middle market remains highly competitive with further failure anticipated.”
Like for Like Sales Q1 2012 v Q1 2011
(Industry Average)
REI Retail Industry vs
CSO & CSI Figures Mar 2011-Mar 2012
15.00
-2
-3
March
+0.73%
-4
-5
Feb-12
-10.00
-15.00
CSO
REI
CSI
Mar-12
Jan-12
Dec-11
-5.00
Nov-11
February
-1.68%
Oct-11
-1
Sep-11
March
Aug-11
Feb
0.00
Jul-11
Jan
January
-4.72%
5.00
Jun-11
0
10.00
May-11
1
(INDUSTRY
AVERAGE)
Apr-11
LIKE FOR
LIKE SALES
Q1 2012
Mar-11
2
LIKE FOR LIKE SALES
Q1 2012 V Q1 2011
Industry Average
-2.56%
Footwear
-0.40%
Furniture & Flooring
-9.83%
Garden Centres
-0.62%
Gift & Homeware
-3.92%
Grocery
-1.43%
Hot Beverages
1.36%
Jewellery
-3.64%
Ladies Fashion
-4.04%
Menswear
-4.22%
Pharmacy
1.61%
Q1 2012
-2.56%
** Source: CSO Figures published March 2012 & ESRI/KBC Indices
Report published March 2012 **
REI Irish Retail Industry Productivity Review Q1 2012
3
Footwear Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Keith Rogers – Head of Retail – Ecco Footwear:
“2012 started as 2011 finished with less footfall and more effort required to
close sales. The mild weather in Jan & Feb did not help boots and other
seasonal footwear which forced us to discount more than we budgeted for.
March had a difficult start but finished very strong with high demand for
casual and summer footwear when the fine weather came. All footwear
retailers are currently doing a sun dance to ensure a good Q2 with strong
sandal and other summer product sales before we get to the sale period in
June.”
Commentary from John Walsh – MD – Walsh Brothers Shoes:
“The 2% VAT increase to 23% has made retailing difficult and makes it hard
to achieve last years targets. Constant negative media commentary
surrounding household charges and water charges is worsening consumer
sentiment. Fine weather has suited some areas more than others and
footwear is very susceptible to weather.”
8.00
2012
6.00
FOOTWEAR
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
4.00
2.00
Jan
-5.31%
-4.72%
Feb
0.11%
-1.68%
March
5.38%
0.73%
Q1 2012
-0.40%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
Like For Like Sales Q1 2012 (Industry Average)
Footwear Sales
REI Irish Retail Industry Productivity Review Q1 2012
4
Furniture & Flooring Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Blaine Callard – CEO – Harvey Norman:
“Furniture retail continues to be severely depressed and is possibly
deteriorating further. Other large ticket categories benefit from the breakdown & replacement market whilst furniture purchases can be in theory
deferred indefinitely when discretionary spend is tight. Erosion of average
price continues as furniture and flooring retailers continue to liquidate stock
to generate cash-flow. Rents a major burden on furniture retailers with large
floors.”
Commentary from JP Kennedy – MD – TileStyle:
“Sales continue to decline during the first quarter of 2012 and it is still
unclear when the true bottom will be reached. Flooring and furniture require
large display footprints and high levels of sales knowledge and customer
service. Labour and rent represent 34% of total overheads and controlling
these continues to pose significant challenges to the sector while at the
same time providing a positive customer experience and meeting ever
increasing levels of expectation from the customer.”
2.00
2012
0.00
-2.00
FURNITURE &
FLOORING
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
Jan
-12.13%
-4.72%
Feb
-7.45%
-1.68%
March
-8.01%
0.73%
Q1 2012
-9.83%
-2.56%
-4.00
-6.00
-8.00
-10.00
-12.00
-14.00
Like For Like Sales Q1 2012 (Industry Average)
Furniture & Flooring Sales
REI Irish Retail Industry Productivity Review Q1 2012
5
Garden Centre Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Fergal Doyle – Director - Arboretum:
“Weather is a huge factor in our business and we have been spoilt in April for
the past three years with an early summer start coupled with consumers
replacing plants following the harsh winters. Q2 is make or break for garden
centres, with a poor and cold April start we are hoping for a more traditional
summer in May and June. “
Commentary from Mairead Horkan – Personnel Mgr. – Horkan Group:
“It’s been a disappointing first quarter in the garden centre industry. Having
Paddy’s weekend and Mother’s day on the same weekend did not help in
March as two normal busy weekends were put into one. The cold weather
recently has slowed the season down but we are hopeful that the Q2 period
will help improve the overall year’s figures.”
25.00
2012
20.00
GARDEN
CENTRE
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
15.00
10.00
Jan
0.51%
-4.72%
Feb
0.18%
-1.68%
March
-1.37%
0.73%
Q1 2012
-0.62%
-2.56%
5.00
0.00
-5.00
-10.00
-15.00
-20.00
-25.00
Like For Like Sales Q1 2012 (Industry Average)
Garden Centre Sales
REI Irish Retail Industry Productivity Review Q1 2012
6
Gift & Homeware Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Jonathan Stanley – CEO – Homestore + more:
Commentary from Olive Donovan – MD – Howards Storage World:
“Consumer sentiment has improved as a result of the consumer adjusting to
the current economic climate however money does seem to be tighter.
Consumers are not buying frivolous purchases and are very careful about
what they are buying. I feel we are very close to the bottom across all retail
sectors. I think that the CSO figures will report like for like growth by Q4
2012.”
“Generally the first quarter started negatively but March was somewhat
positive with an increase in footfall and slight increase on this time last year
even though things are still quite distressed. Consumer sentiment has
improved slightly.”
6.00
2012
4.00
2.00
GIFT &
HOMEWARE
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
Jan
-5.44%
-4.72%
Feb
-1.49%
-1.68%
March
1.84%
0.73%
Q1 2012
-3.92%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
Like For Like Sales Q1 2012 (Industry Average)
Gift & Homeware Sales
REI Irish Retail Industry Productivity Review Q1 2012
7
Grocery Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Kevin Jephson – Director – Ardkeen Quality Food Store:
Commentary from Eoin Warner – Retail Director – The Butler’s Pantry:
“The economic outlook remains challenging with spending and sentiment
weak. It is noticeable that the consumer will only respond to value.
Occasions such as St. Patrick’s Day and Mothers Day have become very
important as such events provide good reason to spend as borne out by the
March 2012 data, however such growth is hard won.”
“After a strong Christmas, the start of 2012 was slow. We experienced
strong sales around Valentines Day and Easter. People are saving more for
celebrations and continue to demand value for money coupled with good
quality. I predict minor growth towards the end of 2012.”
4.00
2012
GROCERY
SALES
2.00
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
Jan
-3.33%
-4.72%
Feb
-3.38%
-1.68%
March
2.76%
0.73%
Q1 2012
-1.43%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
Like For Like Sales Q1 2012 (Industry Average)
Grocery Sales
REI Irish Retail Industry Productivity Review Q1 2012
8
Hot Beverage Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Paul Candon – Marketing Director – Topaz:
Commentary from Owen Doorly – MD – Il Valentino:
“Hot beverage sales were flat for Q1 2012 with discretionary spend way
down. We face a difficult year ahead – consumers do not have money to
spend. Any growth will be from increasing store numbers, sizes or concept
change, which requires investment.”
“January was a bit milder this year which drove footfall comparable with
2011. Consumer sentiment was strong around Valentines week and
Mother’s day in March was a welcome addition to the calendar. I feel that
minor growth would be optimistic for the remainder for 2012.”
6.00
2012
4.00
HOT
BEVERAGE
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
2.00
Jan
0.64%
-4.72%
0.00
Feb
2.06%
-1.68%
March
-0.15%
0.73%
Q1 2012
1.36%
-2.56%
-2.00
-4.00
-6.00
-8.00
Like For Like Sales Q1 2012 (Industry Average)
Hot Beverage Sales
REI Irish Retail Industry Productivity Review Q1 2012
9
Jewellery Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from John Moore – MD – Moores Jewellers:
“Certainly the year got off to a slow start. Average transaction value is
dropping but volume is holding up with consumers continuing to move away
from gold and focusing on lower price points such as charms instead. I
would hope to see a lift in sales volumes for Q3 and Q4 2012.”
Commentary from Stephen Fitzpatrick – Director – Pandora:
“Mothers day was a bigger event for us than Valentines Day in 2012. I feel
that consumers were shopping for “thank you’s” for mothers perhaps helping
out with child-minding and other luxuries that the consumer cannot afford in
this day and age. Footfall is on par with last year. The rest of 2012 will be
rocky but we hope that Q4 will bring some positive results particularly with
Christmas trade.”
2.00
2012
JEWELLERY
SALES
0.00
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
Jan
-4.99%
-4.72%
Feb
-0.59%
-1.68%
March
0.68%
0.73%
Q1 2012
-3.64%
-2.56%
-2.00
-4.00
-6.00
-8.00
-10.00
Like For Like Sales Q1 2012 (Industry Average)
Jewellery Sales
REI Irish Retail Industry Productivity Review Q1 2012
10
Ladies Fashion Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Robert Barron – Marketing Director – Pamela Scott:
Commentary from Jean McCabe – MD – Willow Boutique:
“The Ladies Fashion sector is very difficult. Footfall is on par with 2011
however consumers are reluctant to spend as a result of media
scaremongering around the Household charges and other austerity
measures. Consumers are unsure what the remainder of 2012 will bring. I do
not foresee like for like growth until consumer sentiment improves in Ireland.”
“We are focusing on excellent customer service and engagement. Cash flow
is quite poor with consumers giving purchases serious consideration – they
are slower to buy. Footfall is strong and I feel that 2012 could experience a
mild increase in sales volumes provided overly negatively media
commentary abates.”
6.00
2012
4.00
LADIES
FASHION
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
2.00
Jan
-5.97%
-4.72%
Feb
-3.47%
-1.68%
March
-1.33%
0.73%
Q1 2012
-4.04%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
Like For Like Sales Q1 2012 (Industry Average)
Ladies Fashion Sales
REI Irish Retail Industry Productivity Review Q1 2012
11
Menswear Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Louis Copeland – MD – Louis Copeland Menswear:
“The last couple of months have been difficult. However, consumer
sentiment has improved in recent months and I feel that by mid May 2012 we
could experience like for like growth in Menswear sales. “
Commentary from Richard Doody - MD – Counter Propaganda:
“In Menswear there has been a clear improvement in consumer sentiment
since the start of the year. We feel this is mainly due to better news on the
global and domestic economy with several large job announcements in
Ireland and an improvement in the US economy as well as a steadying in
the Euro zone. There could be some decent growth in Q2 if the economic
momentum can be kept up.”
6.00
2012
4.00
MENSWEAR
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
2.00
Jan
-7.26%
-4.72%
Feb
-1.91%
-1.68%
March
0.84%
0.73%
Q1 2012
-4.22%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
-12.00
Like For Like Sales Q1 2012 (Industry Average)
Menswear Sales
REI Irish Retail Industry Productivity Review Q1 2012
12
Pharmacy Sales - Q1 2012
Comparable with Retail Industry Average
Commentary from Cormac Tobin – MD – DocMorris | Unicarepharmacy:
Commentary from Rachel Gubbins – MD – Medicare:
“One of the strongest quarters for Pharmacy in the last number of years,
driven by strong flu category sales in March and Mother’s day falling earlier
than usual. Prescription items and sales remain strong however the IPHA
agreement will impact negatively on sales in Q2 2012.”
“It is great to see a return to growth in the pharmacy sector, albeit very
slight. This is, however, tempered by the potential effect of the ongoing
IPHA negotiations”.
6.00
2012
4.00
2.00
PHARMACY
SALES
LIKE FOR
LIKE SALES
Q1 2012
(INDUSTRY
AVERAGE)
Jan
-0.89%
-4.72%
Feb
1.12%
-1.68%
March
3.78%
0.73%
Q1 2012
1.61%
-2.56%
0.00
-2.00
-4.00
-6.00
-8.00
-10.00
Like For Like Sales Q1 2012 (Industry Average)
Pharmacy Sales
REI Irish Retail Industry Productivity Review Q1 2012
13
Average Transaction Value/Sales per Square Foot - Q1 2012
AVERAGE TRANSACTION VALUE - Q1 2012
Q1 2012
Q1 2012
€200.00
€160.00
SECTOR
€120.00
AVERAGE
TRANSACTION
VALUE
SALES PER
SQUARE
FOOT
€80.00
Industry Average
€48.06
€122.16
€40.00
Footwear
€47.35
€124.84
Furniture & Flooring
€173.99
€38.40
Garden Centres
€24.78
€42.86
Gift & Homeware
€27.48
€67.14
Grocery
€12.67
€168.31
Hot Beverages
€3.71
€117.48
Jewellery
€69.69
€170.87
Ladies Fashion
€49.59
€90.26
Menswear
€57.19
€57.63
Pharmacy
€17.56
€259.23
€0.00
SALES PER SQ FT - Q1 2012
€280.00
€240.00
€200.00
€160.00
€120.00
€80.00
€40.00
€0.00
REI Irish Retail Industry Productivity Review Q1 2012
14
Wage Cost as a % of Sales - Q1 2012
Commentary from Tommy Smyth – MD – Tom Smyth HR Advisors:
“Pay freezes continue as strongly as ever, with very little union activity
seeking pay increases. One area being considered by employers are more
creative bonus or commission based schemes to reward increased
employee sales. Base salaries are static and I don’t foresee this will change
in 2012.”
Commentary from Barry Whelan - MD – Excel Recruitment:
“We have seen an erosion in wages since December 2008, when wage
freezes came in very quickly and have not lifted since. Many executive
wages have not risen in four years. It is felt that employees are taking
voluntary pay decreases of on average 10% across all sectors. Job
applicants are now more realistic then ever before.”
Q1 2012
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
REI Irish Retail Industry Productivity Review Q1 2012
SECTOR
WAGE COST
as a % OF SALES
Industry Average
16.57%
Footwear
15.48%
Furniture & Flooring
18.70%
Garden Centres
15.48%
Gift & Homeware
14.92%
Grocery
12.43%
Hot Beverages
23.21%
Jewellery
19.24%
Ladies Fashion
15.73%
Menswear
16.34%
Pharmacy
15.43%
15
Rent as a % of Sales - Q1 2012
Commentary from Jack Devlin – Director - GVA Donal O’Buachalla:
Commentary from David Fitzsimons – CEO – REI:
“At this stage, given the very depressed economic climate, long standing
lease (UORR) retailers are not getting the benefit of market change where
rents are falling between 50% and 60% from the peak levels in 2007. Both
secondary and provincial locations and indeed retail parks where vacant
units stand are remaining vacant year on year. New leases offer advantages
such as reduced rents, store fit outs and other enticements however long
standing lease holders do not see the benefit of these changes.”
“The rent investment ratio recorded over the Q1 2012 period indicates a very
distressed situation for many operators. In Q1 2011 the rent % investment
ran at 12.21%, this has now grown to 12.70% indicating that while sales
activity has eroded further over the past 12 months large scale rent
reductions are not forthcoming. The unwillingness of NAMA to apply
meaningful rent reductions to a significant cohort of tenants has further
exasperated the rent crisis.”
Q1 2012
20.00%
18.00%
16.00%
SECTOR
RENT COST
as a % OF SALES
Industry Average
12.70%
14.00%
Footwear
15.06%
12.00%
Furniture & Flooring
14.74%
10.00%
Garden Centres
4.77%
8.00%
Gift & Homeware
15.92%
6.00%
Grocery
4.91%
4.00%
Hot Beverages
14.57%
2.00%
Jewellery
18.06%
0.00%
Ladies Fashion
15.04%
Menswear
14.95%
Pharmacy
6.88%
REI Irish Retail Industry Productivity Review Q1 2012
16