Irish consumer spending grew at the slowest rate in 17 months in October – amid fears the uncertain economic outlook may be unnerving shoppers.
According to Visa’s latest Irish Consumer Spending Index, expenditure across all payment types – cash, cheques and electronic payments – rose by 4.3 per cent year-on-year.
However, this was the weakest increase recorded since May 2015.
Perhaps more worryingly, the index recorded a 0.4 per cent fall in face-to-face spending, which was the first decline reported since the data series began 26 months ago.
In contrast, eCommerce spending rose by 15 per cent, the highest level in four months, amid suggestions the preferential euro/sterling exchange rate was encouraging more shoppers online.
Wide divergences
The index recorded wide divergences among the sectors monitored with spending on recreation and culture up 15.1 per cent, while spending on clothing and footwear fell 2.8 per cent.
The Visa figures roughly tally with the latest retail sales numbers from the Central Statistics Office (CSO), which suggested the annual rate of growth dropped to 3.8 per cent in September, the lowest level in three years.
"While it is very positive to have recorded the 26th month of consecutive consumer spending growth, there were a couple of negative milestones in October," Philip Konopik, Visa Ireland country manager, said.
“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 and footwear experiencing a third month of contraction in a row,” he said.
Bounce back
“However, one of the busiest trading periods lies ahead, with Black Friday and Christmas offering a potential for a bounce back,” he added.
Separate data from the Central Bank shows total transactions on debit cards amounted to €4.2 billion in September, continuing a broadly upward trend since the post-Christmas low of €3.4 billion recorded in January this year.
The figures showed just under €2.6 billion of debit card spending was attributable to point-of-sale activity, while the remaining €1.6 billion was accounted for by ATM transactions.
