Will Brexit put a dampener on Ireland's Christmas?

Retailers says that shoppers are worried heading into the festive period...

Business group IBEC has warned that a "growing unease" among the Irish public has led to a softening of consumer demand and retail sales in the run-up to Christmas.

Its says that a dip in Irish consumer sentiment in the third quarter comes "as the full effects of the UK decision to leave the EU begin to crystalise."

Retail Ireland's (IBEC's group representing Irish retailers) latest report has found that the value of retail sales grew by just 1.1% (year-on-year) in the third quarter - this is the lowest growth rate recorded in 2016.

It follows a growing number of economic indicators pointing to an increase in consumer caution.

Niall Carson PA Archive/PA Images

Retail Ireland Director Thomas Burke commented: "The Irish retail sector is working hard to adjust prices to reflect this new reality, but is still selling products that were purchased at a much different exchange rate a number of months ago. Goods prices have fallen by 2.9% on average over the last quarter and, in the first 10 months of the year, were down 8.5% on the same period three years ago.

"There is limited scope to reduce prices further. Retailers are squeezed on the one side by a consumer that is demanding price reductions to reflect the sterling devaluation, and on the other by UK-based suppliers seeking price increases to offset increasing input costs. This pressure has the potential to destroy margins in the sector."

He added that sterling's slum has resulted to more shoppers travelling to Northern Ireland and an increase in the number of Irish consumers buying goods from British online retailers.

Retail Ireland called on Government to support the retail sector over the coming months to ensure that recent currency shifts do not threaten Irish retail jobs.

A recent study found that the average shopper will shell-out €493 on Christmas presents this year.