Consumer mood brightens as Christmas nears and Brexit blues fade for now
Bank of Ireland reports sentiment rise as AIB predicts Black Friday mobile pay surge
People walking past a shopfront advertising Black Friday discounts. Photograph: Rob Stothard/Getty Images
Consumer sentiment “bounced” this month, leaving retailers poised to benefit from more upbeat levels of spending this Christmas, according to the latest economic snapshot from Bank of Ireland.
The bank’s Economic Pulse report found that the relatively uneventful passing of the Halloween Brexit deadline contributed to the first rise in consumer confidence since June.
With a no-deal Brexit off the table for 2019, households are now less downbeat about the outlook for the economy, with one in six planning to spend more on Christmas presents this year and 57 per cent intending to spend a similar sum to last year.
There was a small rise in business sentiment during the month, but retail was the most positive sector, with retailers buoyed by “broadly positive expectations” for the Christmas trading period.
“Given the time of the year households are starting to turn their attention towards Christmas, with the majority planning to spend either the same or more on presents compared with last year,” said Bank of Ireland’s group chief economist Loretta O’Sullivan.
“While Brexit hasn’t gone away, commentary around no deal has abated, and consumer and business sentiment has responded positively,” Ms O’Sullivan said. “However, firms are still cautious in relation to their investment plans for next year.”
The improvement in the consumer mood comes ahead of Black Friday this week, a retail industry concept borrowed from the US where many shoppers have the day off after the Thanksgiving holiday. It is now an established trigger for late November sales and other promotions in the Irish retail sector.
Figures released by AIB suggest online shopping by Irish consumers was 216 per cent higher on Black Friday last year compared to the previous Friday that month, while in-store spending rose 46 per cent.
Clothing, jewellery and electric goods were the categories that saw the biggest surges in debit card spending on Black Friday, while AIB said the most popular online shopping time during last year’s event was 10am, with online spending decreasing after noon.
The bank came up with the figures after aggregating data for more than 1 million debit card transactions by customers on the last Friday in November 2018.
Some 69 per cent of the transactions related to in-store spending, compared to 31 per cent for online purchases, while mobile payments through Apple Pay, Fitbit Pay and Google Pay generated 4 per cent of the transactions.
AIB said it expected the percentage of these “digital wallet” transactions would increase for this year’s Black Friday, which takes place this week.