Consumer spending tanks, but not all to do with latest lockdown

Falling Covid case numbers are expected to boost consumer confidence

Consumer spending tumbled 14%, year-on-year, in January — with the predictable fall coming only in partial response to the Government reimposing strict social restrictions to fight the spread of the Covid pandemic.

Increases in sales of digital content and home-related spending were not enough to offset huge falls in spending on hospitality, travel, and clothing, according to a survey from payments company Revolut.

Combined spending across the likes of hardware stores, furniture shops, pet shops, florists, and garden centres surged by 154% compared to the same month last year. 

Spending on sportswear also jumped 27%, year-on-year. However, restaurant, bars, and cinema spending was down between 70% and 99%.

However, the drop in spending has not totally been attributed to the lockdown. January spending was 22% lower than in November, when Level 5 restrictions were also in place nationwide.

This would suggest that the decline was not just due to the physical impact of retailers’ doors being closed, according to Trinity College Dublin professor of economics Paul Scanlon.

"January marked a period of unrelentingly bad news on the virus front, as cases soared and hospital admissions peaked.

"Added to the mix is the severity of the current lockdown, which coincided with the traditional period of winter sales. All of these factors, coupled with the ongoing delays on vaccine rollout, no doubt dented consumer confidence," he said.