Consumer spending fell again in February as the impact of the full coronavirus lockdown continued to bite, new figures from digital banking app Revolut show.
Revolut said that overall spending by its Irish customers in February this year was 19% lower than in February 2020. Consumer spending was also 2% down on January 2021, it added.
It noted that spending on digital goods, groceries and items related to the home continued to increase, but this has been significantly offset by the collapse in spending on leisure, hospitality and travel.
Spending by Revolut retail customers on computer programming is up 30%, while spending on computer network services rose by 23%.
Spending on telecoms services increased by 22%, while picture/video production spending grew by 33%.
Revolut said this suggests that large numbers of individuals and small businesses are creating new websites or investing in their home offices and home-based professional services.
Today’s data also shows that spending on dentists is up 35%, with many dentists saying that people are undertaking major dental restructuring instead of using the money on family holidays.
Meanwhile spending in music stores on musical instruments and sheet music was up by 26%, which suggests that people are taking the opportunity of lockdown to learn an instrument.
But spending on shoe repair shops was down by 61% and as large numbers of people no longer drive to work or the shops, spending on car parks was down by 76% year-on year.
With no large weddings or black-tie galas for people to attend, the clothing hire business has also taken a huge hit and spending there is down by 68% year-on-year.
With foreign travel down to a trickle, luggage and leather goods stores have also taken a hammering with spending in those businesses in February was down by 65% year-on-year.
Today’s research also shows that consumers spent more physically in February than we did online, unlike in November, when for the first time a majority of consumer spending was carried out digitally.
Revolut said the growth in spending online by its users was 53% on an annual basis.
Within that overall increase, the 45-54-year-old group saw spending rise by 56%; the 55-64 cohort saw spending grow by 57% and even the 65+ group’s online spending rose by 41% year-on-year.
Dr Paul Scanlon, Professor of Economics at Trinity College Dublin, said the most striking feature of this month’s report is the significant decline in spending by 19% compared with February 2020.
“Coming on the heels of a 14% decline in January, this underscores the severity of the lockdown and associated decline in consumer confidence. Significantly, it also marks the second successive month of falling consumer spending and the largest decline since last Spring,” Dr Scanlon said.
The Professor said that with the course of the virus still unknown, together with delays in the vaccine rollout, consumers face elevated uncertainty in the immediate future.
“This could continue to undermine confidence and negatively impact consumer spending in the months ahead. Yet on a brighter note it also raises the prospect of an unleashing of pent-up demand once the restrictions ease,” he added.