Visa has released its latest Irish Consumer Spending Index, produced by IHS Markit, which measures expenditure across all payment types (cash, cheques and electronic payments).
The index signalled a third successive decrease in consumer spending during November. At -1.9% year-on-year, the reduction was slightly stronger than that seen in October (-1.4%), but softer than in September.
For the first time since February 2018, the eCommerce channel registered a worse performance than Face-to-Face. Ecommerce spending was down -4.1% year-on-year, following a +0.8% rise in expenditure during October.
This marked the sharpest reduction in spending in the series so far. The solid decline in spending in November potentially reflects the fact that Black Friday occurred at the end of November in 2019, with Cyber Monday falling in December.
The index shows that Face-to-Face spending also declined at -0.6% year-on-year, and although the fall was only marginal, the decline may raise concerns amongst smaller retailers who rely on face-to-face spend as Ireland moves into the festive period.
At such a critical trading time for smaller merchants, Visa says support for independent retailers and merchants has never been more important, and Visa’s “Where You Shop Matters” campaign aims to highlight this by urging Irish consumers to shop local this Christmas.
In November, the sharpest reduction in spending was seen in Clothing & Footwear. Expenditure was down -5.0% year-on-year, and extended the current sequence of decline to eight months. Solid falls in expenditure were also seen in the Recreation & Culture (-4.4) and Miscellaneous Goods & Services (-4.6%) categories, while slight reductions were recorded in Transport & Communication (-1.2%) and Health & Education (-1.3%).
Only three of the eight monitored sectors posted increases in expenditure in November. The most marked expansion was in Hotels, Restaurants & Bars, where spending was up+5.2% year-on-year, the fastest rise since April. Modest improvements were seen in the Food & Drink (+2.1%) and Household Goods (+0.1%) categories.
According to research carried out by Visa, just over half of Irish shoppers (52%) said they would make purchases in a local business in the run up to Christmas, specifically to support local shopkeepers. This sentiment suggests a positive outlook for face-to-face spending across December, which may give rise to stronger consumer spending overall as people prepare for Christmas and the New Year.
Commenting on the index, Ireland Country Manager at Visa, Philip Konopik said, "Although eCommerce fared badly in terms of spend across November, the sharp decline was likely influenced by the later than usual timing of Cyber Monday. Having said that, the high street seems to have weathered the storm much better, experiencing only a marginal decline."
He added, "As our research shows, Irish shoppers are more inclined to shop locally during the festive season, so retailers will be hoping this translates into a positive sales performance in the last month of the year."