Mastercard SpendingPulse - February 2020 | Dublin Economic Monitor

Fe b r u a r y 2 0 2 0

DUBLIN Mastercard SpendingPulse

TM

Dublin Mastercard SpendingPulse Delivering Unique Insights for Consumer and Tourism Spend.

KEY HIGHLIGHTS YEAR-ON-YEAR Q4 2019*

+3.3%

+3.7%

OVERALL SALES

+3.0% NECESSITIES

OVERSEAS TOURISM SPEND

-0.7% DISCRETIONARY

+5.6% HOUSEHOLD GOODS

+8.7% ECOMMERCE

+2.0% ENTERTAINMENT

*RETAIL SALES VALUE (SA)

TM

DUBLIN Mastercard SpendingPulse

| February 2020

DESPITE EASING RETAIL SALES GROWTH REMAINS SOLID IN DUBLIN TOTAL RETAIL SALES INDEX (SA)

126

130

+3.3% YoY

125 120

121

+2.8% YoY

115 110 105

DUBLIN

Retail spending in the Dublin economy continues to register strong growth with a 3.3% YoY (SA*) increase recorded in Q4 2019. Throughout 2019, the annual growth in retail spend in Dublin has averaged +4.2% compared to an average annual growth rate of +5.6% in 2018.

Notwithstanding that, retail spending growth in Dublin exceeded that at a National level (incl. Dublin) in Q4 2019 as has been the case since Q1 2017. On a quarterly basis, consumer spending in Dublin grew by 0.5% QoQ in Q4 2019. This marks a slowdown in the rate of growth in recent quarters following QoQ growth of 2.3% and 0.6% in Q2 and Q3 respectively. Quarterly growth has proven to be volatile in both Dublin and Nationally, and so it is difficult to point to a downward trend at this stage.

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

100

IRELAND

Retail sales growth rates eased across Ireland in Q4 2019 with sales in Dublin up 3.3% YoY. However this was partially driven by difficult comparisons with Q4 2018 when sales surged. While the growth rates in tourist spending also appear more modest, when taken in the context of strong growth in 2018, the growth in Q4 was solid. While the US economy remains on a solid footing, it is reasonable to expect more positive tourist spending as we enter 2020.

Michael McNamara

GLOBAL HEAD OF SPENDING PULSE, MASTERCARD

DUBLIN RETAIL SALES VALUE INDEX (SA)

+3.3%

126.1

+0.5%

YoY GROWTH IN DUBLIN SALES INDEX

DUBLIN SALES INDEX VALUE

QoQ GROWTH IN DUBLIN SALES INDEX

Q4 2019

100 = Q1 2014

Q4 2019

METHODOLOGY A macro-economic indicator, SpendingPulse™ reports on national and Dublin retail sales and is based on aggregate sales activity in the Mastercard payments network, coupled with estimates for all other payment forms, including cash and cheque. This information has been grossed up to present an estimate of the total retail sales of retail businesses in Ireland and Dublin to both residents and tourists. Data is seasonally adjusted but is not adjusted for inflation. Mastercard SpendingPulse™ does not represent Mastercard financial performance. SpendingPulse™ is provided by Mastercard Advisors, the professional services arm of Mastercard International Incorporated. See www.dublineconomy.ie for more info on methodology.

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*All values are Seasonally Adjusted by EY-DKM

TM

DUBLIN Mastercard SpendingPulse

SALES OF DISCRETIONARY GOODS CONTRACT

RETAIL CATEGORY: DISCRETIONARY

123.7

130

-0.7% YoY

125 120 115

115.9

110

-1.3% YoY

105 100

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

95

IRELAND

| February 2020

The final quarter of 2019 marked the first quarter in which negative YoY growth was recorded in retail spend on Discretionary goods in both Dublin (-0.7%) and Nationally (-1.3%). However, this was the only component of total sales to register negative annual growth in the quarter.

Household goods sales, which are generally correlated with consumer sentiment, grew by 5.6% YoY in Q4 2019 in Dublin. Nationally the rate of growth was more subdued at 1.4% YoY. Online sales continue to register strong positive growth amongst Dublin (+8.7% YoY) and National (+4.3% YoY) consumers.

DUBLIN

Discretionary Retail: Department Stores and Clothing Stores.

METHOD: ECOMMERCE

RETAIL CATEGORY: NECESSITIES

220

+8.7% YoY

200

124.7

130

194.9

210

+3.0% YoY

125

190 120

180 170

177.2

160

+4.3% YoY

150 140 130

115

118.5 +3.8% YoY

110 105

120 110

100

100

IRELAND

DUBLIN

IRELAND

Non store Retailers including Electronic Shopping and Mail-Order Houses, Direct Selling Establishments.

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

RETAIL CATEGORY: HOUSEHOLD GOODS

149.9 +2.0% YoY

160

DUBLIN

Grocery: all food and beverage stores.

RETAIL CATEGORY: ENTERTAINMENT 170

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

95 Q1 14

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q1 14

90

180

161.5 +5.6% YoY

170 160

150

150

140

140 130

135.5

120

+0.8% YoY

110

147.2

130

+1.4% YoY

120

IRELAND

Hotels, restaurants and bars.

*All values are Seasonally Adjusted by EY-DKM

DUBLIN

IRELAND

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

Q3 14

Q2 14

Q4 19

Q3 19

Q2 19

Q1 19

Q4 18

Q3 18

Q2 18

Q1 18

Q4 17

Q3 17

Q2 17

Q1 17

Q4 16

Q3 16

Q2 16

Q1 16

Q4 15

Q3 15

Q2 15

Q1 15

Q4 14

90 Q3 14

90 Q2 14

100

Q1 14

100

Q1 14

110

DUBLIN

Household furniture, electronics and hardware.

3

TM

DUBLIN Mastercard SpendingPulse

| February 2020

GROWTH IN TOURISM SPENDING EASED FOLLOWING STRONG GROWTH IN Q4 2018 Annual growth in tourism spend in Dublin was subdued in the final quarter of 2019, registering YoY growth of 3.7%*. This follows growth of 8% and 6.5% in Q2 and Q3 respectively and double-digit growth throughout 2018. The average annual growth rate in 2019 was 7.9% compared to 13.4% in 2018.

The rate of YoY growth across important markets like the US and China has been declining in recent quarters. In the Chinese market tourism spend registered 19.1% YoY growth in Q4 2018 compared to 4.1% in the final quarter of 2019, while the rate of growth in the US market has been declining since Q2 2018 (16.1% YoY) and now stands at 12.4%. The UK market continues to struggle amid Brexit fears and exchange rate volatility. Spending in this market registered -0.4% YoY growth in Q4 2019 and is the third consecutive quarter of decline.

A similar narrative emerges at a National level with 4% YoY growth recorded in Q4 2019 following a period of double-digit growth throughout 2018. Positive annual growth in the UK market may indicate that UK tourists are finding better value for money in locations outside of Dublin. Similar to the situation in Dublin, the US market is the main driver of growth nationally, with annual spend up 9.9%.

Recently published data from the Irish Tourism Industry Confederation identified that tourism spend across Ireland in 2019, estimated at €9.3 million, was down 1% on 2018. This marked the first decline in the value of tourist spending in eight years. Brexit, increased business costs and a return to the 13.5% VAT rate were cited as reasons for the decline.

DUBLIN AND IRELAND TOURIST SPEND BY ORIGIN - Q4 2019 (SA) OVERALL

+4.0% +3.7%

+0.4% -0.4%

+9.9% +12.4%

+0.4% +1.9%

-0.2% +3.7%

+7.6% +4.1%

YOY OVERALL INCREASE IN TOURSIM SPEND IN IRELAND

YOY CHANGE IN SPENDING IN IRELAND

YOY OVERALL INCREASE IN TOURSIM SPEND IN DUBLIN

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

IRELAND

IRELAND TOURISM SPEND SALES INDEX (SA)

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN IRELAND

DUBLIN TOURISM SPEND SALES INDEX (SA) Q1 2014 = 100

220

240

210

230 220

200

210

173.8

190

180.8

200

180

190

170

180

160

170

150

160

140

150 140

130

130

120

120

110

4

YOY CHANGE IN SPENDING IN DUBLIN

DUBLIN

Q1 2014 = 100

100

YOY CHANGE IN SPENDING IN DUBLIN

110 All

UK

USA

Germany

France

China

100

All

UK

USA

Germany

France

Q4 2016

Q4 2017

Q4 2016

Q4 2017

Q4 2018

Q4 2019

Q4 2018

Q4 2019

China

*All values are Seasonally Adjusted by EY-DKM