Irish debit card spend outside Republic soars

Irish consumers spent over €340m via debit card transactions outside of the Republic, during November alone, as shoppers continued to look online for value and avail of a weaker post-Brexit referendum sterling.

The figure — contained in latest Central Bank credit and debit statistics — represents a 32% year-on-year increase. 

While it also includes ATM transactions, it indicates that the already high level of consumer money not staying in the country is on the rise.

The Central Bank figures showed that credit card expenditure outside of the Republic fell year-on-year in every month in 2016 and that the total value of debit card expenditure outside of Ireland, by Irish consumers, was more than double the value of credit card spend.

Recent CSO figures indicated a 0.7% fall in consumer spending volumes in December and a 0.6% drop in value terms. 

While final retail spending figures for 2016 are not yet available, growth for last year is expected to be around 3.5%; down about 1% on the previous year.

A recent report by Visa suggested surging online transactions are masking a significant slowdown in consumer spending patterns.

A new report, jointly produced by the UCD School of Business and the Marketing Institute of Ireland yesterday, said that consumer spending should remain buoyant this year, driven by employment increases and higher disposable incomes, albeit with growth probably being slower overall than it was in 2016.

The report categorised 2016 as a year of two halves; the first ending with Irish consumer confidence levels reaching a record high but the second half showing the US presidential election and the Brexit vote putting the brakes on rising Irish consumer spending growth.

“The signs are quite positive for 2017 although there are two competing forces affecting growth. 

"On the one hand, consumer fundamentals remain very strong — the population is growing quickly, employment is still increasing, inflation is low and the majority of firms expect to give pay increases next year. 

"On the other hand, the uncertainties surrounding the implementation of Brexit imply some downside risk,” the authors said.

Professor of marketing at UCD School of Business Mary Lambkin said that the Central Bank figures don’t necessarily suggest a huge leakage of consumer spend out of the country is putting Irish economic growth potential at risk. 

A large explanation, she said, is that consumer spending in the latter two months of the year is always around 50% higher than the rest of the year. 

However, she did express concern that the growing trend of online shopping — growing by around 20% per annum — is eating into high street sales.

A separate study — from accountancy firm HLB Sheehan Quinn — shows that it’s not just consumers who are wary of Brexit, with only 51% of companies claiming it will have no impact on their business this year. 

Over half said their business is already performing better than this time last year, but only 18% said they have a succession plan in place concerning the ownership of their business.

In its latest quarterly business monitor, also published yesterday, cross-border business development agency InterTrade Ireland noted that as much as 98% of companies on the island of Ireland currently have no plan in place to deal with the fall-out from Britain formally leaving the EU.


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