Inflation drives value of retail spending in Dublin

The value of retail spending in Dublin rose for a ninth consecutive quarter between April and June this year but much of the rise was put down to inflation with consumers spending more money to buy the same basket of goods and services.

According to MasterCard’s latest SpendingPulse, which is produced on behalf of the four Dublin local authorities, retail spending grew 1.1 per cent on the previous quarter and by 4.7 per cent on the same period last year.

“Inflation, which remains at high levels, was a likely contributor, along with strong domestic demand,” the report said.

One of the main drivers was entertainment spending, which rose by 4.7 per cent. This was “reflective of the robust performance of hotels, bars and restaurants since early 2022 – especially as international tourism has been rejuvenated post-pandemic,” the report said.

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Growth also accelerated in discretionary and household goods sales in the quarter, with respective quarterly expansions of 1.5 per cent and 1.4 per cent.

MasterCard noted that the rise in year-on-year retail spending in Dublin of 4.7 per cent was broadly aligned with the national inflation rate in the quarter, “underlining the effects of rising prices”.

The Dublin tourism market produced mixed retail spending results, which may be of concern for “the capital’s ongoing competitiveness and attractiveness”, the report said.

While overall spending grew by 3.1 per cent in the spring and early summer periods on the back increased visitors from the “crucial” US market, there were reductions in the UK and German markets, with respective quarterly reductions in spending of 15.9 per cent and 4.2 per cent.

The finding comes in the wake of reports that high prices are making Ireland and Dublin too expensive for some tourists.

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Michael McNamara, global head of SpendingPulse, MasterCard, said: “In Q2 2023, tourism spending continued to power retail sales results for both Dublin as well as across Ireland.”

“Building on the large rebound in 2022, overall tourism spending in Q2 2023 was up 14 per cent in Dublin and over 18 per cent across Ireland. In Dublin, the growth rate compared to Q2 2022 was driven by spending by American tourists,” he said.