More than €8 of every €10 spent by shoppers on cards is still instore
An analysis of €9 billion of retail credit and debit card transactions by AIB Bank found that 86 per cent of the purchases were made instore last year. The remaining 14 per cent occurred online, just a single percentage point increase over 2017 and two percentage points over 2016.
The statistic was contained within a presentation on Wednesday morning by AIB’s chief analytics officer, Jonathan Duggan, who was speaking at the annual expo of industry lobby group Retail Excellence, at the Citywest convention centre in Dublin.
About 2,000 delegates are attending the two-day conference and exhibition, which kicked off on Tuesday.
Mr Duggan’s presentation drew on data accrued from hundreds of million of card transactions, stripping out purchases such as flights and other non-retail items to provide a snapshot of activity purely in the retailing industry.
Of the instore transactions that made up the bulk of card sales, 44 per cent of the €7.6 billion was spent on groceries and non-alcoholic beverages, AIB estimated. About 17 per cent was spent on clothing and footwear.
When it came to online sales, the proportion spent on groceries fell to 8 per cent, while the proportion spent on clothing almost doubled to 33 per cent.
The data was also parsed to ascertain the effects on grocery sales during the major weather events of 2018, including the Beast from the East snowstorm early in the year and the major summer heatwave. Grocery sales on some days of the snowstorm were down up to 85 per cent compared to usual, while they rose as much as 15 per cent on certain heatwave days, underlining the dominance of instore sales in the sector.
Mr Duggan also mapped the data against screenings of the television series, the Great British Bake Off, showing that bakery sales spiked when the programme was aired.
In terms of retail spending by foreign visitors, using cards from foreign banks, AIB estimated that UK visitors accounted for 34 per cent of these sales, with 27 per cent from the US. French, German and Australian visitors each accounted for less than 5 per cent of retail sales to foreign visitors.
Spending by UK visitors peaked in summer and again in December, while US visitor spending was heaviest during summer months.
Personal injury costs threaten retail viability
Retailers have hit out at the slow pace of insurance reform.
Rising personal injury awards are threatening the viability of the sector, according to Ibec’s Retail Ireland division.
Large numbers of retailers will be unable to meet the rising cost of insurance premiums unless urgent reform to the compensation system is put in place.
Retail Ireland director Thomas Burke said that it is vital for retailers that proposed amendments to the Judicial Council Bill 2017 are now agreed by Government and brought into law before the summer recess.
The group said employer and public liability insurance costs are adding an unnecessary burden and limiting the sector’s ability to grow, create jobs and deliver value and choice to consumers.
Retailers estimate that on average, for every €1 allocated to an insurance claim, a business must make €100 in sales to recoup this outlay.
Mr Burke said: “Rising insurance premiums, fraudulent and exaggerated claims and general inefficiencies in our insurance market have become a major competitiveness issue for retailers in recent years.”
He said retailers report average insurance premium rises of between 5pc and 10pc a year.
This is despite a falling number of incidents in stores due to increased investment in staff training and store layout.
“Retailers are disappointed at the pace of reform and continue to pay for that delay every day in terms of rising premiums and overly inflated claims awards.”
They want a dedicated funding stream to provide resources to allow the Gardaí to tackle what Retail Ireland said was a growing prevalence of fraudulent and exaggerated claims.
“Unless urgent reform is forthcoming, many retailers will simply be unable to meet growing insurance premiums into the future,” Mr Burke said.
Consumers spent €1.7 billion online in March
New figures from the Central Bank show that there are more payment cards than people in this country, with just over six million active credit or debit cards in circulation.
In the first three months of the year, Irish people spent just over €1.7 billion using those cards – that is equivalent to the Government’s health budget for the whole year.
The Central Bank figures show that for every €10 we spent using a costly credit card, we spent €53 with a debit card.
In that three month period, Irish consumers conducted 244 million point of sale transactions using debit cards – that does not include taking cash out of ATMs .
The average spend using a debit card was just over €40.
Using credit cards, consumers here made 34 million transactions, with an average spend of €80 – suggesting that consumers use credit cards for more expensive things.
Debit card spending grew by 19% year on year in March, while credit card spending grew by 10%.
The Central Bank figures also reveal that Irish consumers are spending more on online shopping as well.
Consumers bought €1.7 billion worth of stuff on the internet in March alone – that is the cost of the National Children’s Hospital spent in just one month.
Online shopping now accounts for half of all credit card spending and a quarter of all debit card spending.
According to the Central Bank, we are also spending more on overseas trips.
On average €0.5 billion a month went through credit and debit cards physically used outside of Ireland, including ATM withdrawals.
That amounts to a total of €1.6 billion spent abroad in the first three months of the year, 7% more than the same time last year.
Google complying with EU order in shopping case, says Vestager
Google is complying with an EU order to boost competition in online shopping, Europe’s competition chief said today, brushing aside complaints from rivals demanding more regulatory action.
Google was hit with a €2.4 billion fine two years ago for unfairly promoting its own comparison shopping service.
But it has since offered to allow competitors to bid for advertising space at the top of a search page, giving them the chance to compete on equal terms.
European Competition Commissioner Margrethe Vestager said the measure appeared to be working.
“Now we are in a situation where in 75% of queries there would be at least one rival to Google in the shopping box and 40% of clicks would go to a merchant hosted by one of the rivals,” Vestager told reporters on the sidelines of a Centre for European Reform event.
“This means we do not have a non-compliance case but at the same time also means that we keep monitoring monthly developments,” she added.
Open Internet Project, a Google critic, however argues that the situation has not improved.
“By putting these Google-powered Shopping Units at the top of every relevant results page, above more relevant comparison services, Google continues to reserve the important market for comparison shopping services to itself,” Open Internet Project said in a statement last week.
Top 5 exporters account for over a quarter of all goods exports in 2017
New figures from the CSO show that the country’s five biggest exporters accounted for 26% of all exports in 2017 with the pharmaceutical sector the biggest exporter of goods.
The Central Statistics Office said that the five highest value exporters accounted for over €31 billion of all exports in 2017, while the top 50 enterprises exported 72% of total goods or €87.4 billion of goods.
Today’s figures show that the pharmaceutical sector accounted for 44% of the total value of exports in 2017, comprising €53 billion.
Manufacturing exports were worth €29.4 billion, while exports from the agri-food sector came to €17.9 billion, or 15% of total exports.
Today’s CSO figures also show that a total of 8,614 companies exported their goods in 2017.
There were just 289 large exporters (with over 250 employees) but they accounted for 68% of all exports in 2017.
Meanwhile, a total of 8,300 SMEs exported goods in 2017 with the total value of their exports amounting to €36 billion, or 30% of total exports.
The CSO said this includes 5,081 micro enterprises – businesses with less than ten workers – which exported €7.5 billion of goods.
Cicro enterprises accounted for 59% of exporters and 6% of the value of goods exported, the CSO said.
Meanwhile, the top five importers accounted for €12.9 billion or 16% of total imports in 2017, while the top 50 importing enterprises had imports of €39 billion, or 47% of the total.
The wholesale and retail sector was the largest importer in 2017, accounting for €26.8 billion, or 33% of the total of goods imported.
And the services sector, which includes aircraft leasing companies, imported €26.1 billion (32%) of goods.
Risk of no-deal Brexit has never been greater – Coveney
Tánaiste and Minster for Foreign Affairs Simon Coveney has warned Cabinet colleagues that at no point in the last two-and-a-half years has the risk of a no-deal Brexit been greater.
He said that while a hard Brexit could still be avoided, Britain had failed to come up with any solutions or answers.
Mr Coveney also said that no staff working on no-deal Brexit planning should be redeployed during the summer months.
The memo brought by Mr Coveney has been drafted against the backdrop of the breakdown in talks between the Conservatives and Labour in London.
Taoiseach Leo Varadkar has said that there was detailed discussion at Cabinet today about Brexit and businesses are now going to be asked to step up their Brexit preparations.
Mr Coveney brought a memo on planning to Cabinet on a No deal Brexit.
Government ministers agreed that secondary legislation is needed in some areas and work needs to be done on EHIC (European Health Insurance Cards) and the Erasmus education programme.
The Taoiseach said that the staff are in place for Customs and Revenue and other areas where they are needed.
He said information campaigns informing businesses of the actions they need to take and the supports that are now available will be resumed.
He warned that there are businesses that are “perhaps taking the view that it is going to be alright on the night. And it may well be alright on the night but we cannot assume that.
“We will be asking businesses in particular to step up their planning and avail of the information, supports and advice and the funding that is already available.”
He was responding to questions from Fianna Fáil Finance spokesperson Michael McGrath.
He asked if the Cabinet made any decision today to intensify and step up preparations and efforts to support companies and hiring extra Customs officials.
Meanwhile, British Prime Minister Theresa May will set out details of her “new deal” on Brexit in a speech at 4pm, Downing Street said.
She told a more than three hour long meeting of the Cabinet: “The Withdrawal Agreement Bill is the vehicle which gets the UK out of the EU and it is vital to find a way to get it over the line.”
Her spokesman said the “new deal” includes alternative arrangements, workers’ rights, environmental protections and assurances on the integrity of the UK in the event of a backstop.
Separately, a disorderly conclusion of Brexit negotiations could “plunge the Irish economy into a recession,” according to the Organisation for Economic Co-operation and Development.
It says such a conclusion poses the most immediate uncertainty to Ireland’s economy.
In its latest economic outlook, the think-tank also acknowledges that while new housing completions have been “catching up with demand”, there will continue to be shortages in the dwelling stock for some time.
It notes that despite having moderated recently, property prices remain high and foreign investors account for more than half of commercial property investment in Ireland.
The report, which contains analysis and projections for its 36 member countries and other major economies, says changes in the international tax regime, could affect Foreign Direct Investments by multinational firms, which would pose a significant risk for Ireland.
Economic growth, according to the OECD, is projected to remain robust, but to ease gradually to 3.9% in 2019 and 3.3% in 2020.
Additional reporting Ailbhe Conneely, Conor McMorrow, PA
US delays Huawei ban for 90 days
US officials have issued a 90-day reprieve on their ban on dealing with Chinese tech giant Huawei, saying breathing space was needed to avoid huge disruption.
A Commerce Department filing said the delay does not change the ban imposed by President Donald Trump on national security grounds, an action with major implications for US and Chinese technology firms.
Instead, it grants a temporary licence that will allow Huawei to continue doing business with American firms.
“The Temporary General Licence grants operators time to make other arrangements and (gives) the Department space to determine the appropriate long term measures for Americans and foreign telecommunications providers that currently rely on Huawei equipment for critical services,” said Secretary of Commerce Wilbur Ross.
“In short, this licence will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.”
The Huawei confrontation has been building for years, as the world’s largest company has raced to a huge advantage over rivals in next-generation 5G mobile technology.
US intelligence believes Huawei is backed by the Chinese military and that its equipment could provide Beijing’s intelligence services with a backdoor into the communications networks of rival countries.
For that reason, Washington has pushed its closest allies to reject Huawei technology, a significant challenge given the few alternatives for 5G.
Last week, President Donald Trump declared a “national emergency” empowering him to blacklist companies seen as “an unacceptable risk to the national security of the United States” – a move analysts said was clearly aimed at Huawei.
At the same time, the US Commerce Department announced the effective ban on US companies selling or transferring US technology to Huawei.
It is the implementation of this ban that has been delayed by 90 days.
But the Huawei fight is over more than just US national security. Washington sees Huawei’s rise as emblematic of China’s drive to wrest global technological and economic leadership from the United States.
The Central Statistics Office has sharply revised downwards unemployment rates for March and April, taking the level below 5% for the first time since the financial crisis over a decade ago.
Monthly unemployment rates have been subject to sharp revisions in recent quarters.
The CSO said today that the jobless rate in April had been revised down to 4.6% from the 5.4% previously estimated.
The change was as a result of a big rise in employment, with the CSO reporting that employment jumped by 3.7%, or 81,200 people, on an annual basis in the three months to March.
This compared with a 2.3% increase in the previous quarter.
The CSO’s Labour Force Survey figures – the official source of data for employment and unemployment – also reveal that unemployment decreased by 18,600, or 14%, in the year to the end of March.
This brought the total number of people who were without a job to 114,400 and marked the 27th quarter in succession where unemployment has declined on an annual basis.
Today’s CSO figures also show that long term unemployment, which refers to those people without a job for one year or more, accounted for 35.7% of total unemployment in the first quarter of the year.
Meanwhile, today’s figures show the total number of people in the labour force in the first quarter of 2019 stood at 2,416,300, an increase of 2.7% over the year.
The CSO said this compares with an annual labour force increase of 1.4% the same time last year.
Today’s figures show that the number of people not in the labour force stood at 1,480,200, an increase of 0.7% over the year.
The Labour Force figures also show that jobs growth has been broad based across construction (5.3%), industry (3%) and services sectors (4.5%).
Full-time employment was up 3.5% on the year, and employee jobs were up 5.3% on the year.
The CSO noted that female employment was up 5% on the year, associated with a sharp rise in the female participation rate from 62.3% to 64.3% over the past 12 months.
Commenting on today’s figures, the Minister for Finance and for Public Expenditure and Reform said they confirmed the strength of the country’s labour market.
“Today’s figures confirm that the labour market is no longer in a recovery phase and that we are now zeroing in on “full-employment”, as evidenced by the fact that the unemployment rate of 4.6% is the lowest since end-2005,” Paschal Donohoe said.
Full employment is where just about everyone who wants a job has one, putting upward pressure on wages.
Mr Donohoe said that while full-employment in the country is a welcome outcome, it also presents challenges for policy and he said policies that overheat the economy must be avoided.
“This means ensuring that the labour market remains open and flexible in order to support growth in jobs and living standards, while protecting our international competitiveness,” he said.
He said that greater participation in the labour market by those currently outside should also be encouraged. and policies that foster improvements in productivity are being prioritised.
US announces six-month reprieve on car tariffs
The White House has said that President Donald Trump is delaying a decision by up to six months on whether to impose tariffs on imported cars and parts to allow for more time for trade talks with the European Union and Japan.
It said, however, Mr Trump agreed with findings that imported vehicles and parts can threaten US national security.
President Trump faced a Saturday deadline to make a decision on recommendations by the Commerce Department to protect the US auto industry from imports on national security grounds.
Mr Trump directed US Trade Representative Robert Lighthizer to pursue negotiations and report back within 180 days and said if no deal is reached Trump will decide by then “whether and what further action needs to be taken.”
In a proclamation released Friday, Mr Trump said he agreed with a Commerce Department study that found some imported cars and trucks are “weakening our internal economy” and threaten to harm national security.
The auto tariffs face strong opposition in Congress, including from many prominent Republicans.
Reuters and other new outlets reported earlier this week that Trump was expected to delay the decision.
Automakers have strongly opposed the tariffs, saying they would hike prices and threaten thousands of US jobs.
Mr Trump’s proclamation said “domestic conditions of competition must be improved by reducing imports” and said a strong US auto sector is vital to US military superiority.
The reported cited statistics that US-owned companies’ share of the US automobile market has declined from 67%, or 10.5 million units produced and sold in the United States, in 1985 to 22%, 3.7 million units produced and sold in the United States, in 2017.
At the same time, the reports said imports nearly doubled, from 4.6 million units to 8.3 million units.
US Commerce Secretary Wilbur Ross told President Trump that “successful negotiations could allow American-owned automobile producers to achieve long-term economic viability and increase R&D spending to develop cutting-edge technologies that are critical to the defense industry.”
Mr Trump had threatened to impose tariffs of up to 25% on imported cars and trucks.
Automakers warned the tariffs cost hundreds of thousands of auto jobs, dramatically raise prices on vehicles and threaten industry spending on self-driving cars.
General Motors last year warned that import tariffs could cost jobs and lead to a “a smaller GM” while isolating US businesses from the global market.
Toyota Motor has said the tariffs “threaten US manufacturing, jobs, exports, and economic prosperity.”
Oil rises after OPEC+ says to keep output cuts, Iran tension rises
Oil prices rose to multi-week highs today after OPEC indicated it would probably maintain production cuts that have helped support prices this year, while tension continued to escalate in the Middle East.
Brent crude was up by 90 cents, or 1.3%, at $73.11 a barrel this morning, having earlier touched $73.40, the highest since April 26.
US West Texas Intermediate crude was up 71 cents, or 1.1% higher, at $63.47 a barrel. The US benchmark had reached $63.81 earlier, the highest since May 1.
Saudi Energy Minister Khalid al-Falih said yesterday there was consensus among the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers to drive down crude inventories “gently” but he would remain responsive to the needs of a “fragile market”.
United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not the right decision.
US President Donald Trump had threatened Tehran yesterday, tweeting that a conflict would be the “official end” of Iran, while Saudi Arabia said it was ready to respond with “all strength” and it was up to Iran to avoid war.
The rhetoric follows last week’s attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad’s heavily fortified “Green Zone” that exploded near the US embassy.
OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to cut output by 1.2 million barrels per day (bpd) from January 1 for six months to prevent inventories from increasing and weakening prices.
Brent touched $75.60 on April 25, while the WTI high for 2019 is $66.60, reached on April 23. As of today, Brent is up more than 35%, while WTI has gained nearly 40%.
Another bullish signal was a second week of declines in US drilling operations, with energy companies cutting oil rigs to the lowest since March 2018.
The rig count, an early indicator of future output, fell by three to 802, General Electric’s Baker Hughes energy services unit said on Friday.
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- 24 May 2019More than €8 of every €10 spent by shoppers on cards is still instore
- 24 May 2019Personal injury costs threaten retail viability
- 24 May 2019Consumers spent €1.7 billion online in March
- 23 May 2019Google complying with EU order in shopping case, says Vestager
- 23 May 2019Top 5 exporters account for over a quarter of all goods exports in 2017