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Younger People Spend Less As Inflation Stalls Overall Spending, Says AIB

By Dave Simpson

Consumer spending during the month of August rose by 0.8% despite there being 55,000 fewer transactions, indicating that inflation is influencing Irish purchasing decisions, according to the AIB Spend Trend for August.

Details

The 25-34 and 35-44 year old age brackets account for a combined 47% of total spend in August, and these groups have seen a reduction in total amount spent month-on-month with drops of 1.5% and 0.3%, respectively. All other age groups have seen their total month-on-month spend increase with the 18-24 and the 65+ age groups seeing the largest increases of 2.6% and 2.4%, respectively.

Consumers aged 65 and over made their biggest spend on airline travel (+17%) and hotels (+14%).

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Among all age groups, spending in pubs and off-licences fell the most with an 8% month-to-month decrease. Spending fell by 3% on clothing, groceries and homeware while slight decreases were also seen in airline travel (-2%) and restaurants (-1%). Consumers spent more on electronics (5%), health & beauty (2%), hotels (1%) and hardware (1%).

The data was compiled from over one million card transactions by Irish consumers during August 2022 and has been anonymised and aggregated. All comparisons are based on August versus July data unless otherwise stated. Based on this data, AIB said that it can reveal that:

  • overall, spending was up 0.8% in August compared to the previous month as consumers spent over €87 million a day throughout the month of August;
  • digital wallet payments were up 3% as consumers spent over €13 million a day using the technology on their devices, counting for one in every seven euro spent during the month;
  • and 26 August, coinciding with pay day for many people and the Friday of the August bank holiday weekend, was the busiest day of the month for consumer spending with €118 million spent on that day, compared to the average daily spend for August of €87 million.

Statement By AIB Head Of SME Banking

AIB head of SME banking John Brennan stated, "The August AIB Spend Trend shows that although overall spending in August rose slightly, consumers made fewer purchases. This could be an indicator of inflation’s impact on purchasing decisions. Those with less in savings - typically younger people - will be particularly influenced by rising costs.

"Digital wallet payments are up 3%, showing how increasingly popular the cashless payment method is becoming with the public. They are now spending nearly €13 million euro a day by tapping their phones and watches. This is equivalent to nearly one in every seven euro during the month being spent via a digital wallet."

© 2022 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.

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