Consumer spending flat as shoppers retreat from traditional retail
E-commerce spending rose 9.8% in the last 12 months
Spending in bricks-and-mortar retail outlets fell 5.3 per cent over the last 12 months. Photograph: David Sleator/The Irish Times
Consumer spending was flat in January, with buyers seemingly continuing to retreat from traditional retail in favour of online shopping.
Visa’s Irish Consumer Spending Index found consumer spending rose just 0.1 per cent in 12 months after a 0.4 per cent fall in December on the year.
The figures represent a concerning trend for bricks-and-mortar retailers, with “face-to-face expenditure” down 5.3 per cent compared to a 9.8 per cent rise on e-commerce spending.
“Once again, there was a notable contrast between the high street and e-commerce with online retailers recording almost double-digit growth, while the high street saw the sharpest fall in expenditure since we started the index,” said Philip Konopik, Visa Ireland’s country manager.
The clothing and footwear sector recorded a seventh consecutive month of decline, with a drop of 5 per cent year on year.
Spending on household goods, meanwhile, rebounded in January, rising 8.4 per cent, while hotels, restaurants and bars posted a 4.4 per cent increase in expenditure.
The index, compiled by IHS Markit, suggests “falling consumer confidence” led to spending being pulled back.
“This is particularly the case on the high street as households head online to search out bargains in an uncertain economic and political environment,” according to IHS Markit associate director Andrew Harker.