Dutch debit card transactions decline sharply due to Covid-19
Covid-19 is beginning to hit the Dutch economy, and the confinement measures to halt the spread of the virus are affecting the way consumers spend money. An analysis of ING debit card transaction data shows a 24% decline, year-on-year, for last Friday
The largest year-on-year decline in debit card transactions is in recreational venues, such as cinemas, sport clubs, and restaurants (-83%). This is followed by clothing stores and shoe retailers, which show a decline of 72%. Since people are staying home, spending on transport is also taking a big hit (-46%).
In other places we see an increase in debit card transactions. In particular, toy retailers are benefiting from children having to stay home. Parents are likely resorting to toys to keep children busy, with debit card transactions at these retailers showing a 10% year-on-year increase. Other shops where we see a larger number of debit card transactions are supermarkets (+5%) and DIY shops (+2%).
Where we see fewer or greater debit card transactions
Year-on-year difference for Friday, 20 March 2020
Overall, we see a sharp decline in debit card transactions. Last Friday, they were down 24% from a year before. This is primarily driven by the closure of public places such as restaurants, cafés, cinemas and sport clubs.
Prior to the extra confinement measures, we saw an increase of 10%. This was mostly driven by extra consumer spending in supermarkets.
24% fewer debit card transactions on Friday, 20th March
Percentage change in debit card transactions year-on-year
More debit card transactions in supermarkets
We saw a significant increase in debit card transactions in supermarkets in the past two weeks, peaking at 30% YoY.
Over the last week this has been decreasing. Friday 20th of March showed 5% more debit card transactions than a year earlier.
More debit card transactions in supermarkets
Percentage change in debit card transactions year-on-year
Cafés and restaurants show a decline of c.80%
Covid-19 measures have particularly hit businesses in the leisure industry. We observed an 81% decrease YoY for pin transactions in restaurants and cafés last Friday. Currently, it is just the takeaway and delivery caterers that are keeping debit card transactions above zero.
We observed even larger declines in recreational venues such as cinemas, sport clubs and amusement parks. In particular, last Friday we saw a drop of 95% compared to last year.
Huge decline in debit card transactions in pubs and restaurants
Number of debit card transactions, 2020 week 1 = 100
72% fewer transactions in fashion retailers
Since the government rolled out the new Covid-19 measures, the number of transactions has decreased drastically at fashion retailers. Last Friday, these transactions were 72% below the number observed the same day in the previous year.
Businesses in the personal care and wellness sectors such as hairdressers, beauty salons, and pedicure studios saw a 60% decline in the number of pin transactions in comparison to last year. Since then, the government has forbidden professions that require physical contact to be open until 6 April. As such, we expect to see a further decline in debit card transactions for these types of businesses this week.
72% fewer debit card transactions in fashion stores
Percentage change in debit card transactions year-on-year
DIY shops peak with 40% more debit card transactions
DIY shops, furniture stores, and gardening centres show a strong increase in debit card transactions, peaking at almost 40% higher than a year ago. The spring-like weather conditions and the limited possibilities for leisure activities have seemingly fuelled an increase in gardening and house chores.
In the last couple of days, we have observed a smaller increase in debit card transactions in these types of shops. On Friday, 20 March we saw just 2% more transactions than in the year before. This does fit with the declining short-term trend. However, this number may also be biased downwards due to extra demand last year as the weather was even better back then.
Debit card transactions at DIY shops up by almost 40%
Percentage change in debit card transactions year-on-year
Download
Download article
27 March 2020
Covid-19 crisis: What you need to know This bundle contains 14 articles"THINK Outside" is a collection of specially commissioned content from third-party sources, such as economic think-tanks and academic institutions, that ING deems reliable and from non-research departments within ING. ING Bank N.V. ("ING") uses these sources to expand the range of opinions you can find on the THINK website. Some of these sources are not the property of or managed by ING, and therefore ING cannot always guarantee the correctness, completeness, actuality and quality of such sources, nor the availability at any given time of the data and information provided, and ING cannot accept any liability in this respect, insofar as this is permissible pursuant to the applicable laws and regulations.
This publication does not necessarily reflect the ING house view. This publication has been prepared solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved.
ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam).