Consumer spend up just 4.3% in October
However solid, but slower increases in spending were also seen in the Hotels, Restaurants & Bars, Household Goods and Food & Drink categories.
Although Visa’s Irish CSI overall continued to signal increases in expenditure in October, the annual rate of expansion slowed to its weakest in almost a year-and-a-half.
Expenditure across all payment types (cash, cheques and electronic payments) rose just 4.3% year-on-year (down from 5.0% in September), 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.
This 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.
Face-to-face spending was down 0.4% year-on-year, the first decline recorded in the series so far.
In contrast, e-Commerce spending rose at a considerable pace (up 15.0% year-on-year).
Moreover, this 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 already claim to be shopping online more from the UK since the changes in exchange rates between sterling and the euro.
“The latest Visa Consumer Spending Index for Ireland showed growth easing to a 17-month low in October, chiming with other timely economic indicators which suggest that the expansion in the Irish economy has moved down a gear in recent months,” said Andrew Harker, Senior Economist at IHS Markit, adding that the bad news for the high street retailers was that face-to-face spending also declined year-on-year for the first time in more than two years.
“With a recent poll suggesting around one-third of Irish consumers are planning to shop in Northern Ireland at some point before Christmas to take advantage of sterling weakness, it appears that there are challenging months ahead for Irish retailers.”
But with one of the busiest trading periods lying ahead, Christmas offers a potential for bounceback, claimed Philip Konopik, Country Manager for Visa in Ireland.