Irish consumers spent more money in November than in the same month last year, but the surge was driven largely by a dramatic spike in online sales, with much of the money going to websites in the UK where stock is priced in sterling.
The rate at which spending increased across the Republic slowed for the second month running in November, according to the latest Consumer Spending Index from Visa.
It shows that expenditure across multiple categories in November was up 3.9 per cent compared with the same month last year, the weakest expansion for a year-and-a-half and slower than the 4.4 per cent year-on-year increase recorded in October.
The overall increase in expenditure was driven by eCommerce, where spending was up a record 21.6 per cent compared with the same period last year.
With sterling considerably weaker against the euro, compared to a year ago, and the growing popularity of Black Friday and Cyber Monday, demand by Irish consumers has spiked with online delivery firm Parcel Motel reporting an increase in delivery volumes of over 80 per cent more than this time last year.
In contrast, however, face-to-face spending fell by 3.3 per cent compared with November 2015, the largest decline in expenditure on the high street in the 27-month series history.
November marks the second consecutive month which has seen a fall in face-to-face spending, after the first decline in the series so far was recorded in October.
Spending on transport and communication was up 13.5 per cent in November, compared with this time last year, while spending across the recreation and culture sectors was up 12.3 per cent. These two sectors have been the best performers in each of the past eight months.
Spending on household goods was up 4.1 per cent in November and up 2.9 per cent on hotels, restaurants and bars, the slowest rise in spending in three months.
"November data from the Visa Consumer Spending Index will make for interesting reading for the Irish retail community," said the head of Visa Ireland Philip Konopik. "Despite leading into one of the busiest trading periods in the year, there has been a massive shift to online shopping due to the weak sterling exchange rate and some consumers also travelling over the border in the search for bargains."
He said the overall headline figures also show that the rate of growth of Irish consumer spending is starting to slow “so retailers searching for growth need to look online”.
