SpendingPulse - November 2019

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DUBLIN Mastercard SpendingPulse

TM

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

KEY HIGHLIGHTS YEAR-ON-YEAR Q3 2019*

+4.7%

+8.3%

OVERALL SALES

+4.0% NECESSITIES

OVERSEAS TOURISM SPEND

+2.3% DISCRETIONARY

+9.2% HOUSEHOLD GOODS

+5.1% ECOMMERCE

+3.5% ENTERTAINMENT

*RETAIL SALES VALUE (SA)

TM

DUBLIN Mastercard SpendingPulse

| November 2019

SOLID RETAIL SALES GROWTH IN DUBLIN DIVERGES FROM WEAKER PERFORMANCE NATIONALLY TOTAL RETAIL SALES INDEX (SA)

126

130

+4.7% YoY

125 120

120

115

+2.5% YoY

110 105

DUBLIN

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

Consumer spending in the Dublin economy grew by 4.7% (SA*) YoY in the third quarter of 2019. Growth in retail spend in Dublin continues to exceed the National (incl.

Dublin) level, which recorded a YoY increase of 2.5%.

Regarding annualised changes, this quarter has seen further divergence in spending growth between Dublin and nationally.

Overall retail sales growth in Dublin continued a

On a quarterly basis, consumer spending in Dublin grew by 0.6% QoQ in Q3 2019. This follows 2.3% QoQ growth in the second quarter, and a slight contraction (-0.1%) in Q1. Nationally, the pace of QoQ growth in retail slowed down significantly, from 1.0% to 0.1%. Again, the Dublin vs National divergence is marked.

to offset some of that weakness in Dublin.

solid 2019 in Q3 while spending across the rest of Ireland decelerated. Tourism spending from other markets in Europe remain slow in Q3 2019 however USA tourist spending is helping

Michael McNamara

GLOBAL HEAD OF SPENDING PULSE, MASTERCARD

DUBLIN RETAIL SALES VALUE INDEX (SA)

+4.7%

125.5

+0.6%

YoY GROWTH IN DUBLIN SALES INDEX

DUBLIN SALES INDEX VALUE

QoQ GROWTH IN DUBLIN SALES INDEX

Q3 2019

100 = Q1 2014

Q3 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

METHOD: ECOMMERCE

SPENDINGPULSE: SELECTED SUBSECTORS

182.5

200

+5.1% YoY

190 180 170 160

178.8

150

+10.4% YoY

140

| November 2019

130 120 110

Dublin consumer spending growth was driven by YoY increases in all four consumption categories, most notably Household Goods (+9.2%). Dublin eCommerce sales growth remains strong, with an increase of 5.1% YoY; this however marks a moderation from the Q2 YoY growth of +9.2%, resulting in a QoQ fall of -2.1%. At a National level, YoY growth was driven by all consumption headings save Discretionary Sales. Annual growth was strongest in Household Goods Sales (+4.7%).

100

IRELAND

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

DUBLIN

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

RETAIL CATEGORY: DISCRETIONARY 135

RETAIL CATEGORY: NECESSITIES 130

126

+2.3% YoY

130

125.1 +4.0% YoY

125

125

120

120 115 115

DUBLIN

IRELAND

Discretionary Retail: Department Stores and Clothing Stores.

Q3 19

Q2 19

DUBLIN

Grocery: all food and beverage stores.

RETAIL CATEGORY: HOUSEHOLD GOODS

RETAIL CATEGORY: ENTERTAINMENT 170

180

150.4

160

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

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

95

Q3 14

95 Q2 14

100

Q1 14

100

IRELAND

+3.5% YoY

105

Q1 19

-0.3% YoY

105

116.5

110

115.7

110

+3.5% YoY

150

163.5 +9.2% YoY

170 160 150

140

140 130

136.4

120

+2.0% YoY

110

146.5

130

+4.7% YoY

120

IRELAND

Hotels, restaurants and bars.

*All values are Seasonally Adjusted by EY-DKM

DUBLIN

IRELAND

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

Q1 14

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

Q2 14

110

DUBLIN

Household furniture, electronics and hardware.

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TM

DUBLIN Mastercard SpendingPulse

| November 2019

BREXIT RELATED WEAKNESS IN UK & GERMAN SPENDING OFFSET BY US AND CHINESE TOURISTS Total tourism spend in Dublin registered YoY growth of 8.3%* in Q3 2019, although the rate of growth has moderated from 14.4% a year ago. Dublin growth was positively influenced by spending from American (+13.7% YoY) and Chinese (+6.1% YoY) tourists.

UK tourist spending in Dublin contracted for the third consecutive quarter in Q3. This decrease is particularly noteworthy as the UK is historically Ireland’s largest tourist market. Exchange rate volatility and inflation mean that UK holidaymakers have reduced disposable income. A recent report by Barclay’s Bank (2019) indicates 31% of respondents plan to spend more holiday time at home in the UK in 2019 than in previous years, with 20% citing affordability as their main reason for staying

home. Furthermore, a recent Tourism Ireland study has found that 10-20% of UK tourists are considering postponing foreign trips, including those to Ireland, as they reassess household expenditure in light of Brexit. The CEO of Tourism Ireland has called uncertainty the most pressing issue for the sector. From a national perspective tourist spend increased 4.4% YoY. The USA and China have shown consecutive years of buoyant spending growth; with YoY growth in USA tourism spend averaging 16.5% between Q1 2015 and Q3 2019. The tourism sector was provided with a contingency fund of €40 million to shield it from Brexit-related shocks in Budget 2020. However, it is hoped that, new opportunities - such as emerging markets - as well as marketing Ireland both domestically and internationally will negate the need for this safety net.

DUBLIN AND IRELAND TOURIST SPEND BY ORIGIN - Q3 2019 (SA) OVERALL

+4.4% +8.3% YOY OVERALL INCREASE IN TOURSIM SPEND IN IRELAND

YOY OVERALL INCREASE IN TOURSIM SPEND IN DUBLIN

+13.5% +13.7%

-1.8% +0.9%

+6.8% +6.1%

YOY CHANGE IN SPENDING IN IRELAND

+4.6% -4.2% YOY CHANGE IN SPENDING IN IRELAND

-1.6% -2.6%

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

IRELAND

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

220

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN DUBLIN

YOY CHANGE IN SPENDING IN IRELAND

YOY CHANGE IN SPENDING IN DUBLIN

DUBLIN

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

240 230

210

220

200

210

190

169.7

180

183

200 190

170

180

160

170

150

160 150

140

140

130

130

120

120

110 100

YOY CHANGE IN SPENDING IN IRELAND

110 All

UK

USA

Germany

France

China

100

All

UK

USA

Germany

France

Q3 2016

Q3 2017

Q3 2016

Q3 2017

Q3 2018

Q3 2019

Q3 2018

Q3 2019

China

(1) https://www.independent.ie/business/brexit/uncertainty-the-biggest-threat-to-irish-tourism-sector-gibbons-38579438.html

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*All values are Seasonally Adjusted by EY-DKM