According to the latest AIB Retail Spend Outlook Report, spending has increased across the retail sector in the first half of 2023 in comparison to 2022.
The report shows that consumer spending increased by 6.0% in Q2 2023 versus the same period last year and instore card spend has increased by 6.9% in Quarter 2 compared to 2022.
John Hoolahan, Marketing Director at AIB Merchant Services commented “It is great to see card spending increasing so significantly both in store and online in the first half of this year. It demonstrates the continuing strength of the economy and consumer demand which bodes well for a strong second half of the year for Retailers.”
A number of industries in particular have benefited from the growth including groceries, pharmacies and sporting goods which show an impressive double digit growth.
Change in Consumer behaviour
Much of the underlying growth in the grocery sector has been fuelled by the increase in food cost which is not showing any signs of abating. With consumers having no choice but to purchase food, other sectors such as clothing have seen a decrease of 0.5%, reflecting the cost of living challenge affecting most homes across the country.
The 10.6% rise in spending in the pharmacy sector has been attributed to an increase in suncream purchases, with more people holidaying abroad and the good weather at the beginning of the summer (if we can remember that!), many pharmacies reported being sold out of sunscreen products.
There has also been a change in behaviour by consumers who according to the report are now shopping more frequently. Miscellaneous food store (convenience store) purchases saw an increase of 13.4%, whilst grocery stores saw an increase of in-store purchase on 9.3%. In a bid to reduce household spend people are reducing basket sizes which consequently leads to more frequent buying patterns.
Other factors driving the growth include a stabilisation of inflation where it reduced to 6.1% in June, the lowest rate of inflation in 2023. This partnered with near full employment across the economy and strong savings rates over the past number of years spells positive news for the retail sector as they enter the critical second half of the year.
To view the entire report click
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