Almost all retail sectors are enjoying strong sales growth. But for most this is coming at the expense of discounted prices. However, bars are an exception, with both volume sales and average prices rising.
John McCartney, Director of Research at Savills Ireland comments: “While sales volumes are up by one third since January 2013, deflation has been a consistent theme across Irish retail for nearly five years. In fact, in 8/10 sectors where prices are falling, the extent of discounting has deepened over the last 24 months. One reason is an ongoing compositional shift in the Irish retail landscape towards mid-market and value offerings such as Penneys and the discount supermarkets. It also reflects lower input costs for retailers due to lower oil prices since mid-2013 and, more recently, weak Sterling.But the fact that retailers are being compelled to pass-on these savings to the consumer illustrates just how competitive the retail market in Ireland is, and the continuing disparity between volume and value sales is an area of focus for retailers trading in Ireland.”
Elsewhere in the report, Savills notes the growth of ‘Omni-channel’ retailing, where businesses are exploiting the natural synergies between online and physical retailing – enabling them to capture two modes of consumer behaviour - buying online after experiencing the product in-store and buying in-store after browsing and researching the product online.
Kevin Sweeney, Retail Director at Savills Ireland comments: “Although it is a relatively new phenomenon, the trend of omni-channel retailing is growing rapidly. Initially, the dominant pathway to omni-channel retailing has been for traditional operators to establish online platforms. However, we are now also seeing online-only retailers migrating to an omni-channel approach by opening physical stores, such as Amazon and Missguided.”
Retailers now face the challenge to create the best instore experience for shoppers, and similarly, shopping centre landlords have the opportunity to create more comfortable & enjoyable environments for their visitors.
