Cash is king as plastic misses out

Credit card spending is down by 15 per cent compared to this time last year as consumer habits return to 2005 levels, a new report on the year’s third quarter consumption results jointly released by the UCD Smurfit School and the Marketing Institute of Ireland shows.
The monitor reveals that consumer expenditure is expected to fall by 7.6 per cent by year end with another decline of four per cent next year. Irish consumers are spending 32 per cent less per transaction, down from €66.74 last year to €45.64 this year.
Retail sales value, excluding the motor trade, was down by 10.4 per cent for the year ending August 2009 and by 1.6 per cent compared to the previous month. Volume sales declined less dramatically, 5.2 per cent year-on-year to August 2009.
Pharmaceuticals medical and cosmetics bucked the trend and were up by 3.6 per cent in sales volume in same period. One of the hardest hit sectors was the motor trade, down 31.4 per cent, while household equipment dropped by 17.5 per cent.
For the first time, sales of second hand cars exceeded new car sales. Sales of new cars amounted to 51,414 for the period January to September of this year, compared to 141, 930 in the same period in 2008, a decline of 63.8 per cent.
Clothing, footwear and textiles which were down by 15 per cent; department stores, down 13.8 per cent and food down by 6.7 per cent.
The report drew attention to the climb in consumer confidence in the early part of the year, particularly in June where confidence reached its highest level in over 12 months.
Confidence fluctuated in the third quarter but improved in September. But it is still lower than the UK and Europe, by 13.1 per cent and 7.1 per cent respectively.

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