Online expenditure drove the increase in overall spending with +6.8% year-on-year rise due to Cyber Monday falling in December.
Irish household spending increased in December for the first time in four months, according to Visa’s Irish Consumer Spending Index, produced by IHS Markit, which measures expenditure across all payment types.
Expenditure was up 0.9 per cent (pc) year-on-year for the month of December, following a fall of 1.9pc in November, and although modest, the increase was the sharpest since last April.
“Irish consumer spending was subdued in 2019 in comparison to previous years”
Despite the rise in spending in December, trends in expenditure remained subdued during the final quarter of 2019 as a whole. Consumer spending was down 0.7pc year-on-year, broadly in line with the falls seen in both the second and third quarters of the year.
A key factor in the increase in spending was Cyber Monday falling in December, meaning the eCommerce market performed strongly. Online expenditure was up 6.8pc during December, compared to the same period the previous year, the strongest rise since January 2019.
“A successful December ensured that Irish consumer spending ended 2019 on a positive note”
Face-to-face spending, meanwhile, continued to decline, taking the current sequence of decline to four months. Down 1.4pc year-on-year, the decrease was modest but sharper than seen in November.
Increases in spending were seen in the majority of sectors across Ireland during December, with hotels, bars and restaurants up by 4.5pc. Solid rises were also recorded in the transport and communication sector (3.4pc), recreation and culture (3.3pc) and clothing and footwear categories (2.9pc), with the latter bringing an end to the eight-month sequence of decline.
“Data suggests that conditions on the high street remain challenging”
Only two sectors recorded decreases in consumer spending, with food and drink down 1.5pc and health and education down 0.2pc. The fall in food and drink expenditure was the first in three months.
Discussing the results of the index, Philip Konopik, Ireland country manager for Visa said; “Irish consumer spending was subdued in 2019 in comparison to previous years. This reflects that the majority of gains from the economic recovery have arrived and the same levels of increases in household spending that we have seen in recent years cannot be expected.
“While spending may have plateaued somewhat in December, it comes as no surprise that sectors like hotels, restaurants and bars, and recreation and culture saw boosts as the public celebrated Christmas with meals and nights out over the holiday period.”
Andrew Harker, associate director at IHS Markit added; “A successful December ensured that Irish consumer spending ended 2019 on a positive note. A strong rebound in eCommerce expenditure drove the increase in overall spend, helped by the fact that Cyber Monday occurred at the start of December in 2019.
“Data suggests that conditions on the high street remain challenging, however. Retailers will be hoping that 2020 brings more stability on the political front, helping to solidify consumer confidence and keep households spending.”
By Stephen Larkin
Published: 15 January, 2020