Valentine’s Day helps boost Irish consumer spending in February with +11.3% year-on-year increase

DUBLIN, 7 March 2016:Growth of Irish household expenditure stepped up a gear in February, according to Visa Europe's Irish Consumer Spending Index. Spending was up +11.3% year-on-year across all payment types (cash, cheques and electronic payments), faster than the +7.5% seen in January and the steepest recorded in the 18-month series history, surpassing the previous best from November last year. The year-on-year comparison will have been flattered by the additional trading day in 2016 due to the Leap Year. Rises in expenditure have been recorded throughout the series so far, but rates of growth have gathered momentum since the final quarter of 2015.

Increased disposable income and consumer confidence helped boost spending during the month, with a number of sectors benefiting from Valentine’s Day as people purchased gifts like flowers and on restaurant and hotel bookings. Looking specifically at Visa Europe’s own data, the Irish public were one of the most romantic nationalities based on spending as the average price paid on Visa cards for flowers came to €55. This ranked higher compared to other nationalities such as the UK and Germany where €47 and €33 was spent on Visa cards per bouquet respectively. It was not restricted to flower purchases as the traditional “dinner and a movie” Valentine’s Day date also proved popular.

Growth in consumer spending across all payment methods accelerated across both channels, with a record increase registered for face-to-face expenditure. The high street benefited from an increased willingness among consumers to spend on discretionary items, seeing a +9.2% rise in expenditure compared to the same month last year. eCommerce continued to see the sharper expansion, with spending rising +15.4% year-on-year.

As has been the case in each of the past three months, the Recreation & Culture sector registered the sharpest expansion of those monitored as consumers spent on items such as sporting goods and cinema tickets. Expenditure was up +21.1% year-on-year in this sector, the strongest in the series so far. Further evidence of the recent success of the leisure industry was provided by another sharp increase in spending in the Hotels, Restaurants & Bars category (+18.3%).

In fact, all monitored sectors posted sharper expansions in spending in February compared to January. Household Goods (+11.5%) and Transport & Communication (+11.2%) were two other sectors to record a double-digit rise in spending, the latter benefiting from strong growth at car dealers and continued signs that consumers have been booking trips abroad in greater numbers than at this time last year.

Philip Konopik, Country Manager, Ireland, Visa Europe said:

“Valentine’s Day and the Leap Year helped to maintain the positive increase in consumer spending so far this year, with all sectors of the economy benefiting for the second month in a row. The rise in spending was quite diverse with new car sales up 35%¹ and items like flowers and jewellery proving popular during the month.”

“It was particularly encouraging to see a record increase in high street spending in February as the economic recovery continues to take hold. A clear sign of growing confidence of the retail community was the expansion plans announced in recent weeks by a number of businesses including SuperValu, Maxol and Centra. A recent survey by the Irish Hotels Federation has also shown that 82% of hoteliers are seeing an increase in business levels compared to this time last year.”

Andrew Harker, Senior Economist at Markit said:

“Irish consumers look to be exiting the winter months in fine fettle, judging by the latest findings of Visa Europe’s Consumer Spending Index. Growth was the strongest since we started producing the data towards the end of 2014, albeit flattered by the extra trading day as a result of the Leap Year in 2016. Leisure-related sectors such as Recreation & Culture and Hotels, Restaurants & Bars led the way in February. Households in Ireland look to be taking advantage of improving labour market conditions and low inflation to spend on discretionary items. This all suggests that the first quarter of 2016 has seen the Irish economic recovery continue apace.”

The full report can be read online at www.visaeurope.com/newsroom/