Spending Pulse - MAY 2020

Ma 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 Q1 2020*

+4.3%

+1.0%

OVERALL SALES

+5.1% NECESSITIES

OVERSEAS TOURISM SPEND

-5.1% DISCRETIONARY

+9.6% HOUSEHOLD GOODS

+10.7% ECOMMERCE

-5.7% ENTERTAINMENT

*RETAIL SALES VALUE (SA)

TM

DUBLIN Mastercard SpendingPulse

| May 2020

COVID-19 IMPACTS Q1 DUBLIN RETAIL SPENDING TOTAL RETAIL SALES INDEX (SA)

127

+4.3% YoY

130 125 120

122 +3.1% YoY

115 110 105 100

DUBLIN

Retail spending in the Dublin economy registered the first signs of COVID-19 restrictions, despite the overall 4.3% YoY (SA*) increase recorded in Q1 2020. Significant increases in spending on necessities offset sharp declines in discretionary spending, with the full impact of the health crisis set to hit the economy in Q2 2020. Growth in Dublin continued to exceed that at a National level in Q1 (+3.1% YoY), in line with the trend throughout 2019.

Q1 20

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

Mirroring patterns seen internationally, spending on essentials at the end of Q1 contrasted sharply with declines in discretionary expenditure. Stockpiling Necessities and Household Goods ahead of restrictions helped offset the largest YoY contraction in Entertainment expenditure since 2014.

On a quarterly basis, consumer spending in Dublin grew by 0.8% QoQ in Q1 2020. This marks an acceleration following QoQ growth of 0.5% in Q4 2019. Nationally, quarterly growth remained steady (+0.8% QoQ) in Q1 following +0.9% QoQ in Q4 2019. On a headline basis, the Irish consumer appears to be in rude health, but the rise in Q1 was temporarily boosted by stockpiling of necessities, while the impact of widespread job and income losses will not be fully felt until Q2 2020.

Meanwhile, online sales have gained momentum, a trend that looks set to continue.

Michael McNamara

GLOBAL HEAD OF SPENDING PULSE, MASTERCARD

DUBLIN RETAIL SALES VALUE INDEX (SA)

+4.3%

127.2

+0.8%

YoY GROWTH IN DUBLIN SALES INDEX

DUBLIN SALES INDEX VALUE

QoQ GROWTH IN DUBLIN SALES INDEX

Q1 2020

100 = Q1 2014

Q1 2020

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.

2

*All values are Seasonally Adjusted by EY-DKM

TM

DUBLIN Mastercard SpendingPulse

RETAIL CATEGORY: DISCRETIONARY 130

125

117

120

-5.1% YoY

115

110

112

-4.0% YoY

105

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

100

IRELAND

DUBLIN

Discretionary Retail: Department Stores and Clothing Stores.

HUGE DIVERGENCE BETWEEN NECESSITY AND DISCRETIONARY SPENDING The most striking out-turn in the Q1 data was the divergence in necessity and discretionary spending. A sharp YoY decline was recorded in retail spending on discretionary goods in both Dublin (-5.1%) and Nationally (-4%), as shops closed, and travel restrictions were introduced in March 2020. In contrast, necessities spending increased sharply in both Dublin (+5.1%) and nationally (+4.4%). Household goods sales grew by 9.6% YoY in Dublin and 5.4% YoY nationally but spending on entertainment plummeted in both Dublin (-5.7%) and nationally (-5%). Online sales accelerated in both Dublin (+10.7% YoY) and nationally (+9.7% YoY) in Q1 2020 as the closure of physical shops saw customers move online.

METHOD: ECOMMERCE 220

RETAIL CATEGORY: NECESSITIES

204

210

+10.7% YoY

200

| May 2020

130

128

+5.1% YoY

125

190 180

120

170

189

160

+9.7% YoY

150 140

120

115

+4.4% YoY 110

130 120

105

110

IRELAND

100 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

100

DUBLIN

IRELAND

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

DUBLIN

Grocery: all food and beverage stores.

RETAIL CATEGORY: ENTERTAINMENT

RETAIL CATEGORY: HOUSEHOLD GOODS 190

170 165

140

160

-5.7% YoY

155 150

170

180

+9.6% YoY

170 160

145 140

150

135 140

130

129

125 120

-5.0% YoY

115 110

155

+5.4% YoY

130 120 110

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

100

IRELAND

Hotels, restaurants and bars.

*All values are Seasonally Adjusted by EY-DKM

DUBLIN

100 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20

105

IRELAND

DUBLIN

Household furniture, electronics and hardware.

3

TM

DUBLIN Mastercard SpendingPulse

| May 2020

US MARKET LEADS SLOWDOWN IN TOURISM SPENDING Annual growth in tourism spend in Dublin slowed significantly in the first quarter of 2020, as travel restrictions were introduced, and Patrick’s Day celebrations cancelled. Spending by tourists registered YoY growth of 1%*. This follows growth of 6.1% and 2.9% in Q3 and Q4 respectively and double-digit growth in the year to Q2 2019.

The rate of YoY growth across important markets like the US and China had been declining in recent quarters, but growth turned sharply negative in Q1 2020. In the Chinese market, tourism spending registered -4% YoY growth, while the rate of growth in the US market collapsed to -14%, from a growth rate of +12.6% in Q4 2019. The UK market, in contrast, remained resilient, growing at 1.3% YoY compared to flat growth in Q4 2019.

A weaker picture emerges at a national level with tourist spending remaining flat YoY in Q1 2020 following a period of robust growth throughout 2019.

The UK market was the only market to register positive growth nationally in Q1 2020 at +0.7% YoY. Similar to the situation in Dublin, the US (-1.3%) and Chinese (-16.9%) markets both declined in the year to Q1 2020 These data provide the first glimpse of the sudden stop in tourism in Ireland at the end of Q1 2020, with the effects of COVID-19 likely to be even more damaging to retail and hospitality businesses during the usual peak summer months in Q2 and Q3 2020.

DUBLIN AND IRELAND TOURIST SPEND BY ORIGIN - Q1 2020 (SA) OVERALL

0%

+1.0%

+0.7% +1.3%

-1.3% -14.0%

-3.7% -6.4%

-15.5% -16.4%

-16.9% -4.0%

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) 220

210

210

200

200

180 170

160

160

150

150

140

140

130

130

120

120

110

110 All

UK

180.3

190

171.2

170

100

4

Q1 2014 = 100

220

180

YOY CHANGE IN SPENDING IN DUBLIN

DUBLIN

Q1 2014 = 100

190

YOY CHANGE IN SPENDING IN DUBLIN

USA

Germany

France

China

100

All

UK

USA

Germany

France

Q1 2017

Q1 2018

Q1 2017

Q1 2018

Q1 2019

Q1 2020

Q1 2019

Q1 2020

China

*All values are Seasonally Adjusted by EY-DKM