Spending on hospitality and on groceries falls, Bank of Ireland figures show

Irish consumers are reining in their spending suggesting that inflation is beginning to bite

'[S]ome people may be getting more prudent with their money as they look ahead to the second half of the year,' according to  Jilly Clarkin of Bank of Ireland. File picture: Leah Farrell/Rolling News

Irish consumers curtailed spending in pubs and in restaurants, and on groceries, clothing, and electrical goods, in June, according to new Bank of Ireland figures that suggest inflation is starting to bite.

The lender's data are based on spending on its debit and credit cards and show fallbacks for a large range of goods and services in June from May, possibly because  households are anticipating paying more for their bills in the autumn and winter.        

Spending in pubs by 8% in the month, was down 6% on clothing, while 3% less was spent in restaurants, Bank of Ireland said. Spending on sun holidays rose sharply from May, as expected. 

Certain sectors have begun to experience a stabilisation in the number of #job vacancies, following an acceleration in demand during the pandemic. These include jobs in #IT, #Science, #Pharmaceutical & Food as well as Production, Manufacturing & Materials.https://t.co/qlpqpvKQOT

— IrishJobs (@Irishjobsie) July 8, 2022

"It’s probably too early to identify a clear trend, but some people may be getting more prudent with their money as they look ahead to the second half of the year,” the bank's Jilly Clarkin said. 

The Government and private economists are closely watching all types of surveys to detect whether spending, economic growth, and employment will wilt amid the cost-of-living crisis. The Central Bank said in a major report this week that many households emerged from the Covid crisis with additional savings. However, lowest-income households have limited "buffers" to insulate against large price hikes, it said.                       

Separately, a survey by IrishJobs.ie showed the number of job vacancies was levelling out, with a rise of 4% in vacancies in the three months to the end of June. Retail, hospitality, tourism, and travel continue to have a large number of vacancies, but there was only an increase of 1% in vacancies for jobs in IT. 

"With economic and geopolitical uncertainty dominating today’s news agenda, it’s clear that employers are becoming more cautious when it comes to expansion in order to counteract the effects of growing inflation, while others are simply responding to a decreased need for services in the wake of the pandemic," IrishJobs said. 

Meanwhile, Tesco in Britain and Kraft Heinz on Friday struck a deal to bring back the tomato ketchup and baked beans to supermarket's shelves following a dispute over prices. 

European retailers are locked in extended price negotiations with giant food companies which have announced plans to lift prices to curb the impact of soaring raw material costs.