Irish households will spend an average of €2,587 this December, approximately €720 more than any other month of the year and roughly €26 more than Christmas 2015.
This is according to Retail Ireland, the Ibec group that represents the retail sector, who have today published their Christmas Retail Monitor 2016
Despite challenges in the market, retailers remain positive. The report predicts an increase of 3.7% in consumer spending this December compared to last year, with total sales of €4.21 billion up from €4.05 billion in 2015 - an increase of €160 million.
The challenge for Irish retailers this Christmas will be to ensure that this buoyancy is felt locally and that Irish based retailers benefit from this additional spending. The monitor tracks key trends across the economy and sector to give an insight into how they are likely to impact the key Christmas trading period.
The Retail Monitor also highlights significant growth in e-commerce transactions as we approach Christmas. Central Bank statistics show that e-commerce transactions recorded on Irish debit and credit cards jumped by 20% from €1 billion to €1.2 billion between July and September as the value of sterling fell. This was way above trend and is likely to be tracking the currency shift. This growth is likely to continue into the Christmas period.
While prices are falling, there has been a significant rise in disposable income across the economy. Gross disposable income was up 1.8% in the first half of 2016 having grown 5.3% in 2015. With goods prices in the first 10 months of 2016 down 8.5% on the same period three years ago and the labour market continuing to improve, consumers should be in a stronger position to spend when compared to last Christmas.
Also, more people are in work this Christmas, which is good news for retailers. In the the third quarter 2016, the employment market reached over two million people; this was the highest level of employment recorded since the fourth quarter 2008. The numbers employed is now expected to be 2.9% higher this Christmas compared to last.
Retail Ireland Director, Thomas Burke said, "The next few weeks are by far the most important trading period of the year. While retail sales growth has softened in recent weeks, retailers remain optimistic. More people at work, a rise in disposable incomes and falling prices should lift the consumer mood and translate into increased sales."
He added, "Currency pressures and a drop in consumer sentiment have made recent months difficult for many retailers. But the retail sector's challenge is the consumer's opportunity. The coming weeks will see heavy pre-Christmas discounting, and a New Year sales bonanza."