The latest Irish Consumer Spending Index (CSI) released by Visa today shows that the annual rate of expansion slowed to the weakest in almost a year-and-a-half.
Expenditure across all payment types (cash, cheques and electronic payments) rose +4.3% year-on-year, down from +5.0% in September and the weakest increase since May 2015.
The latest expansion was also slower than the average seen across the 26 months of the series so far. The latest slowdown in the rate of expansion continued a recent trend which has seen much weaker increases in expenditure than in the first half of 2016. Growth in overall spending was hampered by a reduction in expenditure in face-to-face categories.
Face-to-face spending was down -0.4% year-on-year, the first decline recorded in the series so far. This followed a marginal increase in the previous month.
In contrast, eCommerce spending rose at a considerable pace (+15.0% year-on-year). Moreover, the rate of expansion quickened to a four-month high, with the sterling exchange rate making UK online retailers a more attractive option. Recent Red C research findings have shown that 29% of consumers are already claiming to be shopping online more from the UK since the changes in exchange rates between sterling and the euro.
The index shows that wide divergences were also registered among the broad sectors monitored. Recreation & Culture remained the star performer, seeing spending rise +15.1% year-on-year. Meanwhile, Transport & Communication was the only other sector to see growth accelerate, with expenditure up +9.6% year-on-year. Solid, but slower increases in spending were also seen in the Hotels, Restaurants & Bars, Household Goods and Food & Drink categories.
Spending in the Clothing & Footwear sector continued to fall in the year to October. The latest reduction (-2.8% year-on-year) was the third in as many months and the sharpest in two years.
Country Manager at Visa Ireland, Philip Konopik said, "While it is very positive to have recorded the twenty sixth month of consecutive consumer spending growth, there were a couple of negative milestones in October. The fact that face-to-face spending recorded the first decline since the Visa Consumer Spending Index began is worrying for the Irish retail community, in particular for Clothing & Footwear experiencing a third month of contraction in a row. However, one of the busiest trading periods lies ahead, with Black Friday and Christmas offering a potential for bounceback."
Source: www.businessworld.ie
