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Friday 6 December 2019

Dearest Christmas since the crash as households splash extra €940

Central Bank says 28pc of all card transactions are online
Central Bank says 28pc of all card transactions are online

This Christmas will be the most expensive since before the economic crash a decade ago.

Households will spend an average of €940 more this month as they stock up on treats and splash the cash on presents.

They are expected to spend nearly €5bn overall despite falling consumer sentiment.

In October, worries about household finances and the impact of a no-deal Brexit pushed consumer confidence to its lowest level since August 2013.

However, according to the latest economic outlook from Ibec, households will spend €1.6bn more this month when compared with the average monthly spend this year.

This works out at around €940 extra in household expenditure in December, which is €50 more than two years ago.

For many retailers, the benefits of growth in consumer spending will be tempered by online competition and increased cross-border shopping as a result of the weakness in sterling.

Ibec pointed to recent figures from the Central Bank on the spending habits on Irish debit and credit cards, which showed that 28pc of all transactions are online.

December is traditionally the busiest time of the year for shop owners.

Crucial

For some goods categories, the Christmas period is especially crucial, and accounts for more than 18pc of sales in books, toys and games outlets.

In addition, 16pc of sales in department stores and 15pc in electrical goods retailers are made in December, according to the outlook.

So far this year, retail sales are up 3pc in value as strong wage and employment growth translated into consumer demand.

Elsewhere, two out of every five credit and debit card payments were contactless in the third quarter of the year.

Contactless payments are relatively low value, averaging €12.03 per transaction in the three months to September 30, according to the Banking and Payments Federation.

It comes shortly after an analysis of CSO data showed the cost of Christmas has reached a 10-year high and is now set to hit the same level as at the height of the Celtic Tiger, .

Consumer price data shows a steady rise in inflation over the past 10 years has put the current cost of living on a par with where the country was only weeks before the 2008 crash.

It is also 7pc higher than where we were a decade ago, meaning more money is set to be spent on festive goods than in the years since the downturn.

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