Consumer spending rises even as number of transactions drops, AIB says

Consumer spending during August rose by 0.8 per cent despite there being 55,000 fewer transactions, as higher prices start to bite.

The 25-34 and 35-44 year old age brackets accounted for a combined 47 per cent of total spend in August. These groups have seen a reduction in total amount spent month-on-month with drops of 1.5 per cent and 0.3 per cent respectively. Overall, consumers spent over €87 million a day throughout the month.

The report “shows that although overall spending in August rose slightly, consumers made fewer purchases,” AIB head of SME banking John Brennan said. “This could be an indicator of inflation’s impact on purchasing decisions.”

“Those with less in savings – typically younger people – will be particularly influenced by rising costs,” he said.

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All other age groups saw their total month-on-month spend increase, while the 18-24 and the over 65 age groups saw the largest increases of 2.6 per cent and 2.4 per cent respectively.

Consumers aged 65 and over spent biggest on airline travel, up 17 per cent, and hotels, up 14 per cent.

Spending in pubs and off-licences fell 8 per cent in August compared with July, the biggest drop across any sector. Spending fell by 3 per cent on clothing, groceries and homeware while slight decreases were also seen in airline travel, down 2 per cent, and restaurants, down 1 per cent.

Consumers spent more on electronics (5 per cent), health and beauty (2 per cent), hotels (1 per cent) and hardware (1 per cent).

The data was compiled from over one million card transactions by Irish consumers during August 2022 that has been anonymised and aggregated.

Digital wallet payments rose 3 per cent with consumers spending €13 million a day using the technology on their devices, counting for one in every seven euro spent during the month.

The Friday of the August Bank Holiday weekend was the busiest day of the month for consumer spending with €118 million spent.

“Digital wallet payments are up 3 per cent, showing how increasingly popular the cashless payment method is becoming with the public,” Mr Brennan added.