Visa’s Irish Consumer Spending Index, produced by IHS Markit, which measures expenditure across all payment types (cash, cheques and electronic payments), recorded a modest year-on-year increase (+1.0%) in consumer spending in Ireland during November, representing the weakest growth in just over a year, slowing from +4.0% in October.
Irish retailers also suffered in November as shoppers avoided the high street and opted to shop online for Black Friday bargains. Face-to-Face spending was down -4.3% year-on-year, the first reduction since August 2017 and amongst the sharpest since the series began in September 2014. In contrast, the rate of growth in eCommerce spending accelerated in November. At +12.2% year-on-year, the increase in expenditure was the fastest since March 2017.
Six of the eight broad sectors covered saw expenditure increase in November. The sharpest rate of expansion was again recorded in Household Goods (+8.9% year-on-year), although growth slowed to a four-month low.
Slower increases in expenditure were also seen across the Recreation & Culture (+3.4%), Hotels, Restaurants & Bars (+4.2%) and Transport & Communication (+1.7%) categories. The only sector to see growth quicken in November was Food & Drink, where spending was up +3.0% year-on-year. This was the fastest increase since August.
One of the key areas of weakness in November was the Clothing & Footwear sector, where spending fell -4.1% year-on-year, the fifth reduction in as many months. Moreover, the rate of contraction was the sharpest since February 2017.
Philip Konopik, Ireland Country Manager, Visa said:
“Household spending in November showed modest growth at just +1.0% year-on-year. The annual Black Friday sales failed to pull Irish consumers to the high street, with spending growth focused online. This is cause for concern for bricks and mortar retailers in the run-up to Christmas, with only a short window to encourage shoppers back into their stores during the crucial festive period. However, Food & Drink spend was a highlight last month rising +3.0% year-on-year, a promising sign for grocery retailers as households look to celebrate Christmas and the New Year.”
Andrew Harker, Associate Director at IHS Markit said:
“The Black Friday period looks to have been more of an online phenomenon in Ireland this year, with waning confidence among consumers leading them to search out discounts online as opposed to heading out to the high street. The pace of expansion in overall spending growth was modest, suggesting a lack of momentum heading into the crucial Christmas period.”