Retail card spend in Ireland in 2023 increased 3.3 per cent compared to 2022, according to the latest data from AIB. “While growth slowed towards the end of the year, the final quarter of 2023 still saw positive card spend increases of 1 per cent compared to the same period in 2022,” says AIB retail sector specialist, Ciaran Foley.
The number of card transactions increased by 2.3 per cent in the quarter while overall consumer spending for in-store shopping was up 0.7 per cent versus the same period in 2022 with total online sales up by 1.8 per cent.
“Card spend in department stores was the top growth performer during the period, despite the Dublin riots before Black Friday, with in-store spend increasing by 14 per cent,” Foley points out. “This drove an overall card spend increase of 9.6 per cent for the quarter, as consumers looked to enjoy the Christmas shopping experience.”
Shoe shops saw the largest subcategory spend decline, down 8.6 per cent, with a drop in in-store spend the main driver. Spend in jewellery shops also declined by 1 per cent, across both in-store and online.
“Spend on groceries increased by 3.6 per cent in the quarter supported by increased demand in the run up to Christmas with both in-store and online sales channels seeing increases of 3.4 per cent and 6.4 per cent respectively,” Foley adds. “The overall number of grocery card spend transactions increased by 5.3 per cent in the quarter pointing to consumers not only spending more but also carrying out more transactions when compared to the same period in 2022. This could be explained by smaller basket sizes per store visit and people shopping more often. Overall spend in the quarter was driven by another rise in grocery spend for Christmas. Spend in 2023 surpassed the significant levels witnessed for Christmas 2022 driven in the main by food price inflation but also increased in-store and online visits.”
Off-licence sales increased by 1.4 per cent during the period which was in contrast to previous quarters in 2023 which saw a drop. Growth in the final quarter was likely driven by a strong Christmas trading period with spend up 2.7 per cent in December alone. Spend in the homeware and hardware sector saw a 4.2 per cent decrease in value sales in the quarter, with a 6.8 per cent decrease in-store and a 0.3 per cent increase online.
“Consumer confidence reports for January suggest consumers are more confident than in 2023 with energy prices beginning to fall and grocery inflation beginning to reduce,” Foley notes. “An increase in the availability of discretionary spend in the early months of the year bodes well for continued demand for retail spending into 2024. The labour force continues to be near full employment which supports growth forecasts for the domestic economy in 2024 and by extension supports a stable consumer spending outlook.”
Increased cost of doing business
One retailer looking forward to a strong 2024 is Petstop, Ireland’s largest pet supplies chain. Operating for nearly 30 years as a family business with 11 stores nationwide and ambitions for further expansion, Petstop is the 2023 holder of the National Retailer of the Year from the Retail Excellence Awards.
“Petstop’s 2023 was marked by several noteworthy accomplishments,” says founder and managing director, Anthony Gallagher. “After opening two new stores in Blackrock, Co Dublin and Athlone, we also expanded our product range, introducing own-brand and eco-friendly options which align with our commitment to sustainability. Collaborations with local pet charities including Dogs Trust, underscored our dedication to animal welfare. Social media campaigns and in-store events created a vibrant and engaged community around the Petstop brand.”
Gallagher is optimistic for the coming year. “The outlook for 2024 is positive and we’re really looking forward to the year ahead. We plan to open five new stores this year, Wexford in mid-March, Waterford towards the end of April, Nutgrove in Dublin during the summer and two additional stores to be announced later in the year.”
He has some advice for businesses facing into challenges. “Stay focused on prioritising the needs of your customers, fostering a positive workplace culture and stay attuned to industry trends. Innovation should be a constant pursuit.”
Foley does point to some challenges ahead for retailers. “The cost of doing business has increased. Uncertainty around demand coupled with high operational costs and tight margins means there is a more cautious outlook for some businesses. Government supports such as the Increased Cost of Business Scheme which is expected to benefit up to 130,000 SMEs will provide help for retail businesses that are working through a variety of challenges. Looking ahead to 2024, despite the slowdown in growth, retailers have cause for cautious optimism.”
