Credit and debit card spending increased by 21% in December

Credit and debit card spending rose by 21 per cent in December compared to November, largely driven by an increase in spending in the retail sector and spending in restaurants, according to statistics from the Central Bank.

Following the easing of restrictions in December, spending in the restaurants and dining sector increased by 66 per cent compared with the previous month. The accommodation and entertainment sectors similarly recorded strong monthly increases.

In-store spending increased by €1.25 billion, or 45 per cent, month-on-month in December. Online spending declined by 7 per cent in December, although grew 21 per cent when compared to December 2019.

The latest high frequency daily card payments data show that spending, including ATM withdrawals, sharply declined immediately after Christmas Eve, impacted by a number of factors and the reintroduction of public health measures.

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In the week to January 25th, spending was 13 per cent lower than the daily average reported in January of last year.

The data indicates that the impact on consumer spending of the current Level 5 restrictions appears greater than that during the previous Level 5 restrictions in October/November 2020.

The latest daily card payments data covers the period up to January 25th captures the reintroduction of Level 5 restrictions in late December.

Similar to the imposition of restrictions earlier in 2020, card spending increased in the days prior to restrictions being introduced, with a subsequent decrease in card spending observed in the days following the introduction.

However, the sharp decline observed immediately after Christmas Eve was likely also driven by a number of additional factors, including seasonality where a large proportion of spending is conducted prior to Christmas Day.

Since the beginning of January, spending has been lower than the average daily spending in January last year. For the week up to January 25th, total card spending was down 13 per cent on the daily average of January last year.

ATM withdrawals were down 40 per cent in the week up to 25 January when compared to the daily average in January 2020. This continues a long-standing trend in ATM usage.

Spending equated to €7.8 billion in December, 21 per cent higher than November. This monthly increase reflects both seasonal trends, and the lifting of restrictions for many sectors. In annual terms, a marginal increase of 1 per cent was recorded.

In-store spending increased by €1.25 billion, or 45 per cent month-on-month, in December as the easing of restrictions allowed for more in person expenditure.

The total number of credit and debit card transactions grew in December to 146 million, from 125 million in November, an increase of 17 per cent. Of this, there were 124 million individual debit card point of sale transactions in December, with an average spend of €44.79 per transaction, showing an increase in both volume and in average spend.

Card spending in the services sector grew by 11 per cent in month-on-month terms, but was 5 per cent lower in year-on-year terms.

Spending in the social sector grew by 45 per cent compared to November, but the spending levels were 10 per cent below December 2019 levels. Spending on restaurant and dining, and entertainment sub-sectors were 12 and 10 per cent below December 2019 levels, respectively.

Total retail spending increased strongly in December, up 22 per cent on the month, boosted by increases in the groceries and perishables, clothing and restaurant/dining sub-sectors.

Grocery spending rose by 22 per cent on November, in line with seasonal trends, while the clothing sector saw a 60 per cent increase month-on-month in December.

Total online expenditure amounted to €2.5 billion in December 2020, a decline of 7 per cent on the previous month. However, this represents a 21 per cent year-on-year increase.

The month-on-month decline was likely impacted by an increase in November online sales over the Black Friday weekend in late November, along with the reopening of retail stores in December which increased the opportunity for in-store shopping.