Press Releases | Visa
Irish consumer spending growth slows to five-month low in October as shoppers adapt to sterling fluctuations
- Overall consumer spending up +0.9% year-on-year, weakest expansion since May
- Face-to-Face outperforms eCommerce for first time in series history as large spike in shopping with UK online retailers a year ago drives year-on-year fall in eCommerce
- Halloween helps to drive spending as consumers opt for treats and entertainment
Dublin, 14 November 2017: Irish consumer spending increased for the eighth successive month during October, but saw the slowest rate of growth since May, primarily due to a fall in purchases from UK online retailers compared to the same month last year.
Visa's Irish Consumer Spending Index, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled a +0.9% year-on-year rise in household expenditure, down from +3.2% in September. The rate of growth was also slower than the average seen since the series began in September 2014.
For the first time in the 38 months for which data have been available, the Face-to-Face category outperformed eCommerce in October. eCommerce spending decreased for the first time in the series so far, down -0.3% year-on-year. This annual decline reflects the base effects from a very strong performance in October 2016 when changes in the euro-sterling exchange rate led to a spike in purchases from UK online retailers, thereby boosting the eCommerce expenditure figures. With consumers now adapted to currency fluctuations, this early level of interest ahead of Christmas 2016 was not repeated last month.
In contrast, Face-to-Face expenditure increased for the second month running on an annual basis. Spending was up +1.5% year-on-year, a slightly slower pace of expansion than was seen in September.
Five of the eight monitored sectors saw increases in spending during October. Halloween helped to drive expansion in the Food & Drink (+2.6%), Recreation & Culture (+3.5%) and Hotels, Restaurants & Bars (+7.4%) categories as consumers opted to spend on treats and entertainment. A solid increase in expenditure was also recorded in the Household Goods (+4.7%) category.
One of the categories affected by the decline in eCommerce spending was Clothing & Footwear, which recorded its first decline in spending in seven months. Transport & Communication spending was little-changed in October, following solid increases in each of the previous two months. In contrast, Health & Education was the worst-performing sector in October, seeing spending drop -4.4% year-on-year. A reduction in expenditure was also recorded in the Miscellaneous Goods & Services category.
Philip Konopik, Country Manager, Ireland, Visa said:
“While the public didn’t take last month’s Budget announcement as an opportunity to loosen up their purse strings too much, it was nevertheless positive to see the eighth successive monthly increase in consumer spending. Halloween provided a welcome boost to a number of sectors as people stocked up on decorations and sweets for trick-or-treaters, while the bank holiday weekend saw people spending on going out and other recreation activities. Due to a contraction in spending with UK online retailers compared to last October, Irish businesses will have been the main beneficiaries of October’s growth in expenditure.”
Andrew Harker, Associate Director at IHS Markit said:
“Latest CSI data suggest that the Irish consumer took a pause for breath in October, with growth easing from the six-month high in September. Rising wages, falling unemployment and solid consumer confidence suggest, however, that growth is likely to continue as we head towards Christmas. While eCommerce spending decreased year-on-year, the picture is not as bad as first appears. Last Autumn saw a big shift to online spending at UK retailers due to sterling weakness leading to very strong growth rates. This effect is now unwinding in the annual numbers.”