Growth in consumer spending has slowed to its weakest in 17 months.
According to the latest Visa’s Irish Consumer Spending Index (CSI), expenditure across all payment types (cash, cheques and electronic payments) rose by 4.3% year-on-year. This is down from 5% in September and the weakest increase since May 2015. The latest expansion was also slower than the average across the 26 months of the series to date.
Face-to-face spending was down 0.4% year-on-year, the first decline recorded in the series so far. This followed a marginal increase in the previous month.
However, eCommerce spending rose by 15% year-on-year. The rate of expansion quickened to a four-month high, with the sterling exchange rate making UK online retailers a more attractive option. Visa pointed to recent Red C research showing 29% of consumers are already claiming to be buying more online from the UK since the changes in exchange rates between sterling and the euro.
Spending on recreation and culture has continued to perform well, rising 15.1% year-on-year.
Spending on transport and communication is up 9.6% year-on-year, while slower increases in spending were also seen in the hotels, restaurants and bars, household goods and food and drink categories.
Ireland country manager with Visa Philip Konopik said the figures will raise some concerns for retailers.
“The fact that face-to-face spending recorded the first decline since the Visa Consumer Spending Index began is worrying for the Irish retail community, in particular for clothing and footwear experiencing a third month of contraction in a row. However, one of the busiest trading periods lies ahead, with Black Friday and Christmas offering a potential for bounce-back,” he said.
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