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Shops miss out as consumers splash the cash on online sales

Shoppers increased their spending in December, but it was mainly driven by a rise in online sales.

Expenditure in shops was flat last year compared with 2016.

Spending in shops grew in the final months of last year, but for 2017 as a whole it was unchanged, according to Visa’s Irish Consumer Spending Index, which measures expenditure across cash, cheques and electronic payments.

This was despite what is known as face-to-face spending rising for four consecutive months at the end of the year.

But the big surge was seen in buying from websites.

Online shopping, up 7.4pc compared with the previous year, was helped by the increasing popularity of online sales events such as Black Friday and Cyber Monday.

However, some commentators have complained that these events benefit big online retailers and are sucking spending out of shops.

The rise in online shopping meant household spending in Ireland continued to go up at a solid pace at the end of 2017.

In the fourth quarter of the year as a whole, spending was up 3.6pc on an annual basis, the strongest rate of expansion seen during 2017.

The increase in consumer spending for 2017 overall was more modest, with year-on-year growth of 2.5pc.

Visa said retailers had a good Christmas, with face-to-face expenditure up more than 5pc on last year.

Household goods were the big sellers in December, with double-digit growth compared with the previous year.

Sharp increases in expenditure were also seen in hotels, restaurants and bars.

There was also more money spent on recreation and culture, with recreation posting the fastest rise since May 2016.

Irish households increased their spending on food and drink on an annual basis in December, the fourth month running in which a rise has been recorded.

Rises were also recorded for clothing and footwear, and transport and communications.

Visa manager for Ireland Philip Konopik said overall spending was up strongly at the end of last year, in what he said was a boost for the economy.

“The increase in Irish consumer spending is reflective of the strides being made in the labour market with the unemployment rate continuing to fall and average weekly earnings continuing to rise,” Mr Konopik said.

Despite higher spending at the end of the year, consumer sentiment was muted.

The rise in consumer spending here is in contrast to the UK where shoppers tightened their belts over Christmas.

This led to the first year-on-year fall in spending since 2012.

Evidence of a consumer slowdown in Britain has mounted since official data showed the weakest household spending growth in five years earlier in 2017.

The fall came against a backdrop of high inflation and worries about Brexit.

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