Heatwave Drives Consumer Spending To Fastest Growth In Two Years
Irish household expenditure has seen its fastest growth in almost two years thanks to the recent heatwave driving consumers out of the house and into the shops.
The sentiment comes from Visa’s Irish Consumer Spending Index, which measures expenditure across all payment types, which found that consumer spending increased by 5.5% year-on-year in June.
June’s spending was also 3.7% higher than that in May, signalling the fastest rise in household spending since July 2016.
“The heatwave in Ireland helped to boost consumer spending in June, resulting in the strongest expansion for almost two years. Sector data shows that Hotels and Restaurants, Food and Drink and Clothing and Footwear all saw growth accelerate as households headed out onto the high street to eat, drink and shop while basking in the summer sun,” said Andrew Harker, Associate Director at IHS Markit
“With the good weather continuing into July, consumer confidence at the highest for nearly two-and-a-half years and unemployment at the lowest in over a decade, the stage is set for further increases in spending as the second half of 2018 begins.”
Visa reports that growth was “solid” in both the online channel and in face-to-face. E-commerce’s growth eased somewhat to a three month low, with an increase of 5.5%. Face-to-face, which saw a 5.4% increase, saw the strongest rise since January.
The fastest growing sector was once again the Household Goods sector. A 13% year-on-year increase saw Household Goods champion the eight other sectors monitored, due to home improvement stores selling goods such as BBQs and garden furniture performing well.
Double-digit growth was also seen in the Hotels, Restaurants & Bars sector, which saw spending increase by 10%, with publicans and hoteliers reporting a heatwave boost with families enjoying ‘staycations’ in Ireland, as well as sporting and music events helping to drive footfall.
Household spending on Food and Drink reached a three-month high in June, up 7.9% year-on-year. Clothing and Footwear grew by 5.0%, Transport and Communication saw spending jump by 7.0% and Recreation and Culture categories rose by 4.5%, with summer clothing and outdoor events proving popular due to the good weather.
“As Ireland enjoyed a heatwave in June, consumer spending continued to tell a positive story recording the fastest rise since July 2016. The good weather benefited the Irish high street in particular, with Face-to-Face spending marking the strongest increase since January,” added Philip Konopik, Ireland Country Manager, Visa
“Notable winners in the recent heatwave were Household Goods and Hotels and Restaurants, both recording double-digit growth. Food and Drink and Clothing and Footwear also experienced accelerations in spend last month as consumers stocked up on the latest trends and essentials to enjoy the sunshine.”
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.