Local spending will help maintain jobs this Christmas
As everyone digests the difficult news from this week's austerity budget and families calculate how they have been impacted by taxation measures and spending cuts announced by Finance Minister Michael Noonan and Minister for Public Expenditure & Reform Brendan Howlin, the extent to which consumer confidence is hit will be watched closely by local businesspeople and traders, who rely on an upsurge in spending in the weeks before Christmas to survive into the following year. Although Irish consumers are, proportionately, still the highest spenders in Europe during the festive season, the cumulative effects of previous austerity budgets which have already sucked hundreds of millions of euro from taxpayers - on top of this year's - has taken its toll on consumers' ability to 'splash the cash' at Christmas time. People are genuinely hurting and are being forced to make huge sacrifices just to get by. That is not just a worry for them - it is also a concern for businesspeople the length and breadth of Ireland. At this time of year, there is inevitably a rallying call to spend money locally in people's own communities at Christmas. This has never been more important this year as many local businesses and retailers struggle to survive from week to week. Following a very steep decline of over 10 per cent in spending last year, it's mildly encouraging for retailers that the drop in spend this year is not anticipated to be as significant as it was last year. A recent consumer survey of Christmas spending predicted that the average spend per household in Ireland this festive season will be €943, down from €1,020 in 2010 and a massive reduction of €411 since the financial crisis first hit in 2008. Of that spend, which also includes money going on food and socialising, some €520 is spent on buying gifts. There are roughly 70,000 households in County Meath, each of which spends almost €950, on average, during the December period. If each household was to commit to spending just half of that total in their own community this year, it would yield almost €33 million to the economy of the county. The run-up to Christmas is a crucial time for local traders, who form the backbone of our local towns and villages, and people are being urged to think of locally-run shops when making purchasing decisions this year. Shopping locally can make a big difference to improving the local economy. Research has suggested that a euro spent with a local business stays in the local economy for five more transactions, whereas a euro spend with a national business operating locally stays in the local economy for just two transactions. When people spend money locally, it does have an impact. This county's retail outlets employ local people who spend their wages locally in other shops and businesses. The money keeps flowing around the local economy, helping to sustain and even create jobs at a time of great difficulty in the country's economy. The increased frugality observed in previous years remains a feature of Irish spending this year, with many people identifying the main reason for spending less as the economic downturn and the fear that it will get worse, with others citing the fact that they are in debt. The temptation, of course, is to travel across the border to do at least some Christmas shopping in Northern Ireland, a phenomenon which will undoubtedly be aided by the proposed two per cent hike in the top VAT rate south of the border. With many people under huge financial pressure, it's understandable that thousands will travel even significant distances to bag a bargain. But, one has to ask, at what cost? This Christmas, we all need to remember the need to 'shop local'. Money spent locally will ensure that the shops that employ family, friends and neighbours and provide communities with a service all year round will remain open for another year. That may well not happen if households spend most of their money out of the county or across the border. Despite the fiscal pressures Meath families face, the desire to embrace Christmas and all that goes with it remains as strong as ever. In turn, local towns are pulling out all the stops to make it as easy as possible for local consumers to do their shopping in comfort and without hassle. Free parking is being offered in many centres and one town, Kells, is again offering local gift vouchers which are credited with keeping up to €60,000 in retail spending in the town over the last three Christmases.