Shoppers are swerving department stores even while they continue on a post-Covid spending binge, employers say.
Irish people spent €8.7 billion on their debit cards, including cash-machine withdrawals, in the first six months of this year.
This was about 25 per cent more than the same period in 2021, or in 2019, before Covid struck.
But a report published on Thursday by employers’ lobby Ibec shows the pandemic has changed some of their shopping habits.
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The organisation’s quarterly outlook says that spending on clothes, electrical goods, DIY and homeware was well above the average.
“On the other hand, department stores and bookstores are still well below their pre-Covid levels,” the business group says.
Rising heating bills and interest rates could put the brakes on spending growth in the second six months of this year and slow it further in 2023.
“We expect that consumer spending growth for the full year will run at over 6 per cent and 4 per cent in 2023,” the report predicts.
Inflation will rise at 7.5 per cent in 2022 before slipping back to 4 per cent next year, the group says.
Ibec also warns that the rates at which planners are granting permission for new homes and builders are starting them are slowing – both early signs of difficulty in meeting ongoing housing demand.
The organisation blames construction inflation, labour shortages and surging energy bills for the problem.
According to Ibec, 2.15 million people in the Republic have a job, almost every second person. The organisation believes this will grow to 2.38 million next year, when unemployment will fall to 4.5 per cent from 5 per cent.
Most of those left unemployed or temporarily laid off by Government Covid restrictions are back at work, the report notes.
“This leaves 186,800 people remaining on the live register, a figure which also includes about 7,000 refugees from Ukraine as well as part-time workers who qualify for jobseekers’ payments,” it adds.
