Background Notes

Retail Sales Index

An updated Retail Sales Index (RSI) was introduced in the February 2009 release. The underlying methodology remains unchanged. The index is primarily intended to measure short-term trends.  For long term analysis allowance must be made for the fact that the series does not reflect changes in retail structures between updates.

Reference Period

The October 2016 period covers the 4 weeks from 02/10/16 to 29/10/16 and the November 2016 period covers the 4 weeks from 30/10/16 to 26/11/16.

Base Year

This set of monthly retail sales indices has been compiled with reference to base year 2005=100. The underlying structural weighting system is mainly based on the 2005 Annual Services Inquiry. Weights are updated from year to year using ratios of average weekly turnover by size class within business type.

Scope and Coverage

The Retail Sales Index covers, on a sample basis, the retail sales of retail businesses, wholesale businesses with sizeable retailing activity and the separate sales establishments of non-distribution enterprises. Excluded from the index coverage are the direct retail sales from non-distribution establishments together with the incidental retail sales of wholesale businesses. Also excluded are sales by hawkers, street stalls and other retailing activities not conducted from permanent business premises. The statistical unit used for reporting sales figures in this inquiry is the enterprise (i.e. complete business covering all branches).

Methodology

The business categories are based mainly on the Statistical Classification of Economic Activities in the European Community (NACE Rev. 2). The index system is structured on the retailing enterprises covered in the 2005 Annual Services Inquiry classified by 13 retail business categories and four turnover (excluding VAT) ranges. The following NACE Rev.2 categories apply.

• Motor Trades - Sale, maintenance and repair of new and second-hand vehicles and motorcycles (NACE 45)
• Non-Specialised Stores - Retail sale in non-specialised stores with food, beverages or tobacco predominating, mainly supermarkets (NACE 47.11)
• Department Stores -  Retail sale of a large variety of goods of which food products, beverages or tobacco are not predominant activities of the department stores. Retail sale of a general line of merchandise, including wearing apparel, furniture, appliances, hardware, cosmetics, jewellery, toys, sports goods etc. (NACE 47.19)
• Food, Beverages & Tobacco -  Retail sale of fruit and vegetables, meat and meat products, fish, crustaceans and molluscs, bread, cakes, flour and sugar confectionery and beverages in specialised stores (NACE 47.2)
• Fuel - Retail sale of fuel and lubricating products and cooling products for motor vehicles and motorcycles. Excludes wholesale of fuels (NACE 47.3)
• Pharmaceuticals, Medical & Cosmetic Articles - Retail sale of pharmaceuticals, medical and orthopaedic goods, cosmetic and toilet articles in specialised stores (NACE 47.73 - 75)
• Clothing, Footwear & Textiles – Retail sale of textiles, clothing, footwear and leather goods in specialised stores (NACE 47.51, 47.71 – 72)
• Furniture & Lighting - Retail sale of furniture, lighting equipment and other household articles in specialised stores (NACE 47.59)
• Hardware, Paints & Glass - Retail sale of hardware, paints and glass in specialised stores (NACE 47.52)
• Electrical Goods – Retail sale of information and communication equipment, computers, peripheral units and software, telecommunications equipment, audio and video equipment and electrical household appliances in specialised stores (NACE 47.41-43, 47.54)
• Books, Newspapers & Stationery – Retail sale of books excluding second-hand or antique books, retail sale of office supplies such as pens, pencils, paper etc (NACE 47.61 -.62)
• Other Retail Sales – Retail sale of carpets, rugs, wall and floor coverings, music and video recordings, games and toys flowers, plants, seeds, fertilisers, pet animals and pet food, jewellery and other new goods in specialised stores (NACE 47.53, 47.63-65, 47.76-8)
• Bars – Preparation and serving of beverages for immediate consumption on the premises (NACE 56.3)

 For a full NACE Rev2 breakdown of the above categories see attached link:

http://www.cso.ie/en/media/csoie/surveysandmethodologies/surveys/services/documents/pdfdocs/Retail_sales_nace_rev2_descriptions.pdf

The value indices are calculated by updating the aggregate 2005 retail turnover (including VAT) of these enterprises in these cells using the monthly retail sales data provided by the enterprise respondent panel from 2005 onwards.

The compilation of the index for a current month is based on the percentage change in average weekly sales in these cells over the corresponding monthly period of the previous year. The monthly volume indices are calculated by deflating the seasonally unadjusted value indices by specially constructed retail price indices derived from the Consumer Price Index (CPI). A copy of the Retail Sales Index methodology is available on our website (www.cso.ie).

Seasonal Adjustment

All Retail Sales “unadjusted” series are trading day adjusted as they are based on either a standardised four or five week reporting period (see reference period note above). Seasonal adjustment is conducted using the direct seasonal adjustment approach.  Under this approach each individual series is independently adjusted, e.g. aggregate series are adjusted without reference to the component series. Each individual seasonally adjusted series is calculated based on unadjusted data spanning from January 2005 to the current period.

The adjustments are completed by applying the X-12-ARIMA model, developed by the U.S. Census Bureau to the unadjusted data. This methodology estimates seasonal factors while also taking into consideration factors that impact on the quality of the seasonal adjustment such as:

• Calendar effects, e.g. the timing of Easter
• The phase shift effect, i.e. the fact the reporting period of the RSI does not coincide with the calendar month
• Outliers, temporary changes and level shifts in the series
   
  Note: Athough each series is independently adjusted, no changes were made to the Motor Trade series Seasonal Adjustment model to take account of the introduction of the new car registration system in Ireland in 2013.  This is due to a lack of historical data or comparable models that would be required to inform the Seasonal Adjustment model. Once a seasonal pattern has been established we will be in a position to review the Motor Trade Seasonal Ajustment model.
   
  Also to note, the Motor Trade group comprises all retail motor trade activities, of which new car sales accounts for approximately 45% of turnover.

Reference

A detailed description of the Retail Sales Index is available on the CSO website  http://www.cso.ie/en/surveysandmethodology/services/retailsalesindexsurveys/retailsalesindex/ Retrospective details for the current and previous series are also available on the CSO website.

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