Visa has today released its latest Irish Consumer Spending Index which measures expenditure across all payment types (cash, cheques and electronic payments). The index indicated a fall in consumer spending for a second time in the past three months during February.
Having risen slightly during January (+0.1%), expenditure was down by -0.6% on a year-on-year basis. That was the sharpest reduction in real spending recorded for two years.
In line with the recent trend, it was the high street that remained the principal drag on overall expenditure. Face-to-Face expenditure was down by -3.9% on the year, a noticeable fall albeit one that was weaker than January’s series record contraction of -5.3%. In contrast, eCommerce maintained its recent growth run, with expenditure here rising by +5.6% on an annual basis.
Sector data revealed divergent trends in spending. On the one hand, Household Goods and Hotels, Restaurants & Bars recorded notable rates of growth of +7.6% and +6.7% respectively. There was also some growth seen in Health & Education (+3.2%) and a modest increase seen in Recreation & Culture (+1.2%.)
However, spending fell in all other categories covered by the report, perhaps most notably in the traditional retail categories of Food & Beverages (-1.3%) and Clothing & Footwear (-3.8%.) Indeed, for the Food & Beverages sector, the decline was the first in the past 18 months. The bad run for Clothing & Footwear continued as February represented the eighth consecutive month in a row where expenditure declined.
The sharpest reduction in spending was, however, reserved for Miscellaneous Goods and Services (which includes jewellery, health and beauty). Expenditure in this category was down by -5.3%, a fall that was broadly in line with January’s four-year record fall.
Commenting on the index, Ireland Country Manager at Visa, Philip Konopik said, "Irish consumer spending declined for the second time in three months in February, as falling consumer confidence continues to have an impact on spending habits. While the likes of the Hotels, Restaurants & Bars (+6.7% year-on-year) & Recreation & Culture (+1.2% year-on-year) sectors saw a boost in February thanks to the mid-term break and Valentine’s day, this failed to drive sales on the high street with spending down -3.9% year-on-year. Overall it represents a sluggish start to the year, so hopefully we will see an uptick in consumer spending to coincide with St Patrick’s day."