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Irish consumer spending continues to weaken, but Black Friday sales and weak sterling leads to record rise in online shopping

07/12/2016

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The rate of growth in consumer spending in Ireland slowed for the second month running in November, according to the latest data from Visa's Irish Consumer Spending Index. Expenditure across all payment types (cash, cheques and electronic payments) increased +3.9% year-on-year, the weakest expansion for a year-and-a-half, slower than the +4.4% rise seen in October this year.


The overall increase in expenditure was driven by eCommerce, where spending was up a record +21.6% year-on-year. This surpassed the previous joint-highs from April and May this year. With sterling considerably weaker against the euro, compared to a year ago, and the growing popularity of Black Friday, demand by Irish consumers has spiked with online delivery firm Parcel Motel reporting an unprecedented increase in delivery volumes of over 80% more than this time last year.


In contrast, however, face-to-face spending fell by -3.3% year-on-year, the largest decline in expenditure on the high street in the 27-month series history. November marks the second consecutive month which has seen a fall in face-to-face spending, after the first decline in the series so far was recorded in October.


Six of the eight monitored spending categories registered expansion in November, led by Transport & Communication (+13.5%) and Recreation & Culture (+12.3%) which each saw double-digit increases. These two sectors have been the best performers in each of the past eight months. Household Goods (+4.1%) saw a slight pick-up in the rate of expansion in November, but Hotels, Restaurants & Bars (+2.9%) recorded the slowest rise in spending in three months.


Two sectors signalled a drop in household spending over the year to November, namely Food & Drink and Clothing & Footwear. The fall in Food & Drink expenditure (-1.6%) was the first since the series began in September 2014, while Clothing & Footwear (-1.3%) spending has now decreased in four consecutive months. That said, the latest reduction was the weakest in the current sequence of decline.