Food & Drink expenditure increased by 8.6% in February, showing the fastest expansion since March 2018.
Overall consumer expenditure was up 3.2% year-on-year in February, following a 0.9% fall in January, the latest Visa’s Irish Consumer Spending Index, produced by IHS Markit showed.
The February index also represents the last month of data prior to the expected impact on spending due to Coronavirus.
“Our February data is the first sign of the fluctuations we expect to see in next month’s report, with a sharp rise in spending on Food & Drink – the increase of +8.6% is the fastest growth in 23 months," said Philip Konopik, Ireland country manager, Visa.
Face-to-Face vs Online
The rise in Face-to-Face expenditure of 5.5% year-on-year was the strongest in just over two years, the report showed.
Channel data suggested that transactions on the high street were the main driver of overall growth during February as online spending dipped.
Hotels, Restaurants & Bars
While strong growth of household spending was also recorded in the Hotels, Restaurants & Bars which showed a significant 8.2% categories, this figure is expected to drop due to closures within the industry.
Konopik highlighted: "While Food & Drink will continue to rise next month, we expect to see sharp falls in other categories due to the COVID-19 restrictions that are currently being put in place such as pubs closing ahead of St Patrick’s day, typically one of their busiest trading periods during the year.”
Solid increases were seen in the Household Goods (which increased by 4.7%) and Clothing & Footwear (up by 3.1%) sectors, with more modest expansions registered elsewhere during the period.
“While at first glance the solid expansion in household spending during February is a welcome sign, it is worth noting that the extra trading day in February 2020 compared to 2019 will flatter the year-on-year comparisons," said Andrew Harker, economics director at IHS Markit.
"Moreover, events in February have now been overtaken by the wider spread of COVID-19 in Europe. The impacts of the measures put in place to try and prevent further spread of the disease will therefore likely see Irish consumer spending falling during March.”
© 2020 Checkout – your source for the latest Irish retail news. Article by Donna Ahern. Click sign-up to subscribe to Checkout.