Irish Consumer Spending falls for fourth time in past five months in September

Visa’s Irish Consumer Spending Index, produced by IHS Markit, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled a renewed downturn in household expenditure in September. At -2.0% year-on-year, the fall was the second-fastest since the series began in September 2014, behind only that seen in June.

The reduction in September followed a rise of +0.6% in August. Spending has now decreased in four of the past five months. On a quarterly basis, Q3 saw a fall in spending of -0.6% year-on-year, broadly similar to the -0.9% reduction seen in Q2.

Expenditure decreased across both Face-to-Face and online channels during September. Face-to-Face spending decreased for the fourth time in the past five months, and at a solid pace (-2.7% year-on-year). The reduction in eCommerce spending was more modest by comparison (-0.8%), but ended a two-month sequence of expansion.

Six of the eight monitored sectors saw spending decrease year-on-year in September, the only exceptions being Hotels, Restaurants & Bars (+4.7%) and Recreation & Culture (+2.7%.) The Clothing & Footwear sector continued to struggle, seeing a -7.0% reduction in spending. This was the sharpest decline in five years.

Household Goods expenditure decreased for the first time since the series began in September 2014 (-0.7% year-on-year), while Food & Drink (-0.7%), Transport & Communication (-1.9%) and Health & Education (-3.8%) all recorded declines in spend following rises in August.

Philip Konopik, Ireland Country Manager, Visa said:

“We are seeing a clear trend of a slowdown in Irish consumer spending with falls in household expenditure in four of the last five months. The only positive notes in September were growth for the Hotels, Restaurants & Bars and Recreation & Culture sectors, which is a testament to the shift in shopping behaviour with people keen to spend their money on experiences, rather than material goods.”

Andrew Harker, Associate Director at IHS Markit said:

“These are challenging times for Irish retailers, with consumers seemingly reining in spending in line with declining confidence. The Clothing & Footwear sector is particularly under pressure, with even the normally reliable Household Goods category seeing a decline in September. Only the more experience-based areas of consumer spending were able to generate growth.”