Visa finds only ‘moderate’ rise in Irish spend

The growth in Irish consumer spending is “moderate” with online sales continuing to attract more customers while some bricks-and-mortar stores lose out, according to Visa.

It is the latest survey to suggest that while consumers are spending modestly more that many retailers are still struggling to detect significant upturns in activity.

The Visa Irish Consumer Spending Index showed that because of the Easter falling late this year household spending in April rose by the relatively modest 0.7% from a year earlier.

Spending, however, increased 2.4% in the year when spending across March and April were taken together.

The Visa survey takes account of spending across eight retail business types and measures spending by all sorts of payment types, including cash, cheques and by electronic means.

It showed that four of eight retail business types posted annual sales increases in April, but a further four business types posted declines. Easter falling in April helped sales at restaurants and bars to record the largest annual gain, with sales surging last month by 9.4% from April 2016. In March, sales in hotel and bars had increased by just 1.4% in the year. Spending on food and drink climbed 6.3% in April from a year earlier. At 5.2%, sales of household goods posted the third largest annual gain of the eight business types, while clothing and footwear rose 1.5% and ended a long streak of declining or insignificant gains in sales.

Elsewhere, spending declined in April.

There was a “marked” annual decline in spending in health and education, of 5%; miscellaneous goods and services fell by 4.3%, while there was a “modest” fall in transport and communication, of 1.7%; and a 0.4% decline in spending on recreation and culture, according to Visa.

The company said that e-commerce spending continued to grow – albeit the annual increase was only 3.6% in April. But so-called “face-to-face” spending fell for the seventh month in a row.

“While the shifting timing of Easter is to some extent responsible for the slowdown in spending growth during April, the latest [Irish] figures are consistent with the recent trend of relatively moderate rises in spending seen through much of the year-to-date,” said Andrew Harker, senior economist at IHS Markit, who helps compile the Visa index.

“While the unemployment rate continues to fall, subdued consumer confidence and a pick-up in inflation are potentially limiting households’ willingness to spend,” he said. Visa’s Ireland manager Philip Konopik said the increase in spending on clothing and footwear was a “positive”.

Other recent retail industry surveys suggested spending on clothing and footwear have been hot by Irish consumers spending on foreign-owned online sites.

The KBC Ireland and Economic and Social Research Institute reported consumer confidence was steady last month but far from hitting buoyant levels.

Meanwhile, recruitment firm Morgan McKinley Ireland said the number of professional vacancies has continued to increase, as the pool of professionals seeking work shrinks further. The number of finance vacancies has increased as firms prepare for Brexit, it said.


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