Following a strong Q3, retail spending in Dublin contracted in the final and traditionally strongest quarter of the year.
While Q4 saw spending on Necessities remain stable, other segments recorded substantial swings as non-essential retail closed in November. Discretionary spending, including department and clothing stores, which had more than recovered in Q3, fell by almost a half QoQ. Spending on Entertainment also plummeted in the quarter and expenditure on household items gave back some of its Q3 strength. eCommerce had the strongest performance, with sales rising 7% in the quarter following a slight decline in Q3. This highlights once again the dichotomy between physical and online sales.
Mastercard SpendingPulse (Total)
On an annual basis, overall retail spending rose by 1% in Dublin in 2020. This was driven by eCommerce, Necessities and Household Goods which all increased markedly. The largest annual declines were directly related to Covid-19 restrictions, with Entertainment spending falling by over 70% YoY and Discretionary spending reducing by 47.2% YoY. Looking ahead, exceptionally high Irish household saving rates are expected to drive increased retail spending once conditions permit.
Returning Irish support UK tourist spending
Ongoing travel restrictions meant tourist spending continued to be very weak in Q4, falling 19.4% QoQ and 62% YoY. Expenditure from Chinese and US markets was at negligible levels. Only spending from the UK increased in the quarter, likely driven by Irish emigrants returning for Christmas.
With travel restrictions tightening across Europe in early 2021, it is expected that it will be Q2 and beyond before meaningful improvements in tourist spending are witnessed.
“Elevated spending on necessities and household goods helped overall retail sales activity in Dublin make a small gain at the end of 2020. Restrictions placed tremendous pressure on the discretionary, travel and entertainment sectors. Online sales continued to experience increases through the 2020 holiday season, consistent with spending patterns in other countries.
There is speculation that once restrictions are lifted, pent up demand could help the travel, entertainment and restaurant sectors recover.”Michael McNamara, Global Head of Spending Pulse, Mastercard