Dublin, 16 April 2018: Visa’s Irish Consumer Spending Index, which measures expenditure across all payment types (cash, cheques and electronic payments), signalled a slowdown in the pace of growth in March amid severe weather disruption at the start of the month. That said, spending continued to rise on an annual basis, extending the current sequence of expansion to 13 months.
Overall spending was up +1.4% year-on-year in March, the slowest increase since last October. The rate of growth was much weaker than the +4.3% rise seen in February as Storm Emma led to a nationwide red weather alert. Looking across the first quarter of 2018 as a whole, consumer spending continued to rise at a solid pace. At +3.7% year-on-year, the expansion was unchanged from that seen at the end of 2017.
For the first time in six months, growth in eCommerce spending outpaced that seen for Face-to-Face expenditure. eCommerce saw a +2.7% increase in spending, while the rise of +0.7% in Face-to-Face categories was the weakest in the current seven-month sequence of growth as extreme weather deterred people from the high street.
The strongest performing sector was Food & Drink (with an increase of +8.5%), which was boosted by a relatively early Easter and a spike in sales the week after Storm Emma, representing the fastest rise since February 2016. Kantar Worldpanel Ireland data showed that sales of Easter eggs and seasonal chocolate confectionery spiked by 75.2% in March, with consumers also spending €20.33 more than usual the week after the snow as households restocked supplies. A sharp expansion was also recorded in the Hotels, Restaurants & Bars category (+7.3%) during the month.
The Household Goods (+2.5%), Recreation & Culture (+1.7%) and Clothing & Footwear (+1.0%) categories all saw spending increase on an annual basis at the end of Q1. That said, in each case the rate of expansion eased from February.
Three monitored sectors saw falling expenditure, led by Health & Education where spending was down -7.8% year-on-year. Both Transport & Communication (-0.6%) and Miscellaneous Goods & Services (-0.2%) posted marginal reductions in expenditure.
For another month, the sustained increase in spending in Ireland was juxtaposed with March’s UK Consumer Spending Index, which found a further decline in household spending. March’s UK figures fell to -2.1%, signalling the steepest reduction since last October. On average, spending fell by -1.4% year-on-year over the first quarter of 2018, to mark the worst quarterly performance in the UK since Q4 2012. Although the latest reduction in overall spend in the UK was partly driven by disruptions linked to extreme weather, underlying economic conditions remain relatively fragile. Uncertainty around the outcome of Brexit, subdued consumer confidence and signs of a slowing economy all point to relatively subdued spending trends going forward.
Philip Konopik, Country Manager, Ireland, Visa said:
“March’s figures highlight the impact of Storm Emma, with the bad weather preventing some Face-to-Face spending on the high street and influencing the general slowdown of expenditure growth for the month. However, while the poor weather had a negative impact on some sectors, the Irish grocery market experienced strong sales growth during the month, no doubt aided by this year’s early Easter.”
Andrew Harker, Associate Director at IHS Markit said:
“Extreme weather at the start of March caused a marked slowdown in growth of household spending, with consumers deterred from the high street and retailers reducing opening hours. The weakness seen last month, therefore, is likely to prove transitory, with growth hopefully
picking up in April amid better weather conditions, improving consumer confidence and relative job stability. Food & Drink retailers look to have benefited from the run-up to the Easter period at the end of the month, seeing growth hit a two-year high.”
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