Retail spending in Dublin grew during the final quarter of 2021, jumping 5.1pc compared with the final quarter of 2020, according to the latest Mastercard Spending Pulse survey prepared on behalf of the four local authorities in the capital.
But spending was only 0.4pc higher in the period compared to the third quarter of 2021.
The final quarter of the year was marked by the emergence of the Omicron variant which resulted in subdued consumer confidence.
In December, a KBC report noted consumer sentiment in December had declined at its fastest rate since January last year amid concerns over the continuing Covid crisis.
However, confidence among consumers has since improved, recovering significant lost ground. The KBC Bank Ireland consumer sentiment index released earlier this week showed the gauge hit a reading of 81.9 this month, compared with 74.9 in December. It’s still below the 83.1 that was recorded in November.
However, there’s likely to have been another increase in confidence as most Covid-related restrictions have now been lifted.
Michael McNamara, global head of SpendingPulse at Mastercard, said the final quarter of 2021 saw significant gains for the entertainment sector in consumer spending, despite restrictions on the hospitality trade in the period.
“Discretionary spending in department and clothing stores was subdued and is a disappointing conclusion to what was another challenging year for bricks-and-mortar outlets,” he added.
Compared with the final quarter of 2020, spending on entertainment jumped 146pc in the final three months of 2021.
Household goods sales rose modestly in final quarter on a year-on-year basis, and remained at a high level. Online spending was flat year-on-year, rising just 0.4pc.
The survey found that spending by overseas tourists in Dublin rose 76pc year-on-year in the final quarter of 2021, although that was off a low base. Spending by US tourists rose the most in the period, but was still relatively subdued.
The survey found that the German tourist spending in Dublin has recovered to the greatest extent relative to before the pandemic, with their spending in the final quarter of 2021 just 11.6pc below the corresponding quarter in 2019.
At a national level, total retail spending rose 10.7pc year-on-year in the final quarter of 2021, but declined 1.3pc compared with the third quarter of last year. A quarterly reduction in consumers’ discretionary expenditure, which declined 23.8pc, was the main contributor to this fall on a national basis, according to the report.
The Central Bank said earlier this week that Ireland is set for three years of strong economic growth as the pandemic wanes. It said consumer spending will be a big driver of the growth, increasing an average of 6.5pc a year until 2024. It also expects the economy to add 167,000 jobs over the next three years.
The Central Bank’s first quarterly economic bulletin of 2022 predicts that modified domestic demand, which strips out aspects of multinational activity that can wildly skew data, will rise 7.1pc this year and by 5.2pc in 2023. It forecasts a 4.8pc rise in 2024.