As lines between ‘offline’ and ‘online’ retail blur, the reality is the lion’s share – or 70pc – of revenue from online purchases made in Ireland go overseas.

New Central Statistics Office (CSO) figures indicate that online sales as a share of retail fell to almost pre-Covid levels in August after soaring during lockdown.

While this may local causes bricks and mortar retailers to feel jubilant, online retail is a reality among Irish consumers and the majority of this still goes overseas to global giants like Amazon.

“If people are buying online, we need to encourage them and give them the option to buy from an Irish business”

According to the CSO retail sales in August were 8.9pc higher than in February 2020 before the crisis started. However, not every sector has fully recovered. Bars (-42.1pc), Books, Newspapers and Stationery (-12.9pc), Fuel (-5.6pc) and Department Stores (-5.0pc) are still below their February level. All other sectors now have sales greater than they had in February.

The value of retail sales was 0.5pc higher in August 2020 than in July. The annual change in the value of retail sales was an increase of 6.8pc. Excluding Motor Trades, the value of retail sales increased by 0.4pc in the month and grew by 2.2pc on an annual basis.

We need to on-shore online

“The days of referring separately to ‘Bricks and mortar sales’ and ‘online sales’ are coming to an end – progressive retailers no longer refer to their business in such a binary manner”

As the volume of in-person shopping increased with shops reopening, the proportion of total retail sales transacted online fell from the high of 15.3pc recorded in April to 4.4pc in August.

Dark haired man in suit with blue tie.

Owen Clifford, head of Retail Sector, Bank of Ireland

The head of Retail Sector at Bank of Ireland Owen Clifford said that on the face of it this is good news for bricks and mortar retailers, but in reality, masks a bigger discrepancy in that the biggest chunk of online sales goes abroad.

“As with all statistics – the devil is in the detail. The Retail Sales index does not include online sales to retailers not registered in Ireland.  The statistics therefore exclude online behemoth Amazon and a large proportion of the online fashion sector – Boohoo etc.

“At present over 70pc of all online sales in Ireland are going overseas and the majority not included within the CSO data. As a sector, we need to work collaboratively to rectify this alarming statistic and on-shore onlineIf people are buying online, we need to encourage them and give them the option to buy from an Irish business.”

The reality, warns Clifford, is the lines are blurring between “offline” and “online” retail sales and Irish retailers and consumers need to understand this.

“It is heartening to see a strong performance in Retail sales volumes in August (+6.8pc excluding Motor v August 2019) which is driven primarily by activity in physical stores.

“However, the days of referring separately to ‘Bricks and mortar sales’ and ‘online sales’ are coming to an end – progressive retailers no longer refer to their business in such a binary manner.

Omnichannel retailing will only expand further in the coming months and both physical stores and an online channel are integral to the sustainable development of this model and ultimately their business,” Clifford recommended.

Written by John Kennedy (john.kennedy3@boi.com)

Published: 30 September, 2020

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