Cost-of-living crisis takes its toll as consumer spending drops

Debit and credit card spending slumped by 8 per cent in September compared to the previous month, indicating consumers may be cutting back on spending as the cost-of-living crisis begins to bite.

The figures from Bank of Ireland show social spending saw a considerable decline, down 16 per cent on August, as the amount of money spent in pubs, restaurants and fast food outlets each took a hit in the region of 18-28 per cent.

As children returned to school and the summer holidays were put to bed, spending on hotels and resorts also fell by 26 per cent.

Looking beyond discretionary buys, supermarket spending was also down 10 per cent in the month.

Every county in the country reported a decline in spending, the largest of which was reported in Dublin and Sligo, which each saw a drop of 9 per cent on August's figures. Meanwhile, the rates in Cork, Mayo and Limerick were all 8 per cent lower than the previous month.

"August is usually a month where workers shut down their laptops, children pack for an adventure and holiday season kicks into overdrive," Bank of Ireland's Jilly Clarkin said.

"Therefore, it won’t come as much of a surprise for many people to see the September spending stats indicating that consumers nationwide pulled back a little last month and saved up for what could well be a harsh winter."

Ms Clarkin noted that spending decreases were seen across all age categories, particularly those aged 13-17, who cut back by 23 per cent.

"With consumers currently enduring cost-of-living challenges exacerbated by rising energy prices and stubborn inflation hikes, it will be interesting to see if these more restrained spending patterns continue over the coming months," she added.