Consumer spending in Ireland is expected to rise 1.3% in 2014, the first such increase since the start of the recession, according to Retail Ireland.
In its New Year statement, the group said that while the forecasted growth is still low, it’s a positive move in the right direction after spending fell in 2012 and was static in 2013.
But despite positive indications, retailers will remain under severe pressure, due to intense competition in the sector.
Retail Ireland director Stephen Lynam said: “At present, goods inflation is in negative territory as shops battle for footfall. Intense competition in the retail sector is likely to keep prices down in 2014.”
"The recovery in the sector is fragile and Government must ensure that no extra costs or unnecessary regulations are imposed as recovery takes hold. Keeping costs under control is essential if we are to create new jobs. At the height of the boom many costs, including wages, spiralled out of control, we cannot allow this to happen again. Many retailers remain in survival mode and pay expectations need to reflect economic realities,” he added.
Ireland’s economy has been under huge pressure since 2008. The implosion of the banking system prompted a huge round of private sector deleveraging and personal debt decreased from €203.8bn in 2008 to €176.9bn in 2013.
However, increased activity in the retail sector has helped stabilise the situation.
"Many retailers reported a positive start to December, a fall off in sales in the run up to Christmas and a busy post-Christmas period. However, recent news coverage is only anecdotal. Official CSO data, to be released at the end of January, will give the complete picture,” continued Lynam.