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Reaction to the Recession - Changes in Shopping Behaviour - Ireland - November 2010

The recession, which began in September 2008 in RoI, and some months later in NI, has had a profound impact on Irish consumers’ spending and shopping habits. According to consumer data presented in this report, just 29% of NI and 23% of RoI consumers claim that their spending habits have not changed to any great degree over the past 12 months, with marginal difference in agreement between wealthy and less affluent consumers. In particular, consumers have reduced their discretionary spending and opted for discount retailers far more than previously.

This report examines the impact of the current economic downturn on Irish consumers’ spending and shopping habits across an extensive range of sectors and areas, assessing the background macroeconomic factors, key sector trends, the specific areas where cuts to spending have been made, attitudes towards spending and main priorities, if and when the economic situation improves.

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Table of contents

  1. Issues in the Market

      • Key themes
        • Consumer research
          • Abbreviations
          • Future Opportunities

              • Concentrated doses of fun
                • Protecting brands
                • Market in Brief

                  • Consumers struggling despite economic recovery
                    • Consumer prices rising for NI consumers
                      • Volume of sales up, but value down in RoI
                        • Recession affecting ‘shopping habits’ of four in ten
                          • RoI consumers trading down, NI cutting discretionary spend
                            • ‘Dining out’ the biggest single target for spending cuts
                              • Holidays top Irish consumers’ post-recession wish list
                              • Internal Market Environment

                                • Key points
                                  • Prices rising in NI, falling in RoI
                                    • Figure 1: Consumer price indices, UK and RoI, July 2009-July 2010
                                    • Figure 2: Percentage change in consumer price index, by commodity group, UK and RoI, July 2009-July 2010
                                  • Consumers are buying again, but spending less in RoI
                                    • Figure 3: Seasonally adjusted retail sales, volume and value, RoI and UK, June and July 2010
                                  • Retail sales volume and value remain low in RoI
                                    • Figure 4: Seasonally adjusted indices on total retail sales, RoI, Q1 2008-Q2 2010
                                    • Figure 5: Value of retail sales, annual percentage change, by sub-sector, RoI, June 2009-June 2010
                                  • UK (including NI) retail sales proving resilient
                                    • Figure 6: Seasonally adjusted indices on total retail sales, value and volume, UK (including NI), September 2007-July 2010
                                  • Recession hitting consumers’ ‘shopping habits’ hardest
                                    • Figure 7: Areas of consumers’ lives that have been affected by the recession, RoI and NI, April 2010
                                    • Figure 8: Demographics most likely to cite ‘shopping habits’ as area of life affected by recession, NI and RoI, April 2010
                                  • More than half are spending money with more care
                                    • Figure 9: How consumers have reassessed their lifestyles due to the recession (top five responses), NI and RoI, April 2010
                                  • Consumers reassessing value of brands
                                    • Figure 10: Agreement with the statement ‘the recession has made me consider whether or not branded goods are worth paying more for’, by gender, age and socio-economic group, NI and RoI, May 2010
                                  • Consumers switching to own-label over brands
                                    • Figure 11: Agreement with statements relating to own-label products in the context of the recession, NI and RoI, May 2010
                                • Broader Market Environment

                                  • Key points
                                    • Economic recovery, but consumers still struggling
                                      • Figure 12: Economic outlook, RoI and NI, 2008-10
                                    • Unemployment to get worse before improving
                                      • Unemployment close to 14% in RoI
                                        • Figure 13: Unemployment rate, RoI, July 2005-July 2010
                                        • Figure 14: Unemployed persons, classified by last held occupation, percentage of total, RoI, August 2010
                                      • Unemployment expected to increase further in NI
                                        • Figure 15: Number of company insolvencies, NI, 2002-09
                                      • Low interest rates: the one positive of the recession
                                        • Confidence returning in RoI, waning in NI
                                          • RoI
                                            • Figure 16: Consumer Sentiment Index, RoI, July 2009-September 2010
                                            • Figure 17: Index of Consumer Expectations, RoI, July 2009-September 2010
                                          • NI confidence declines for third straight month
                                            • Figure 18: Consumer Confidence Index (seasonally adjusted), UK, September 2009-September 2010
                                          • Growing pessimism about coming months
                                            • Figure 19: Expectations Index (seasonally adjusted), UK, September 2009-September 2010
                                          • Consumer spending still in decline
                                            • RoI
                                                • Figure 20: Consumers’ intentions for surplus money, RoI, August 2010
                                              • NI
                                                • Irish taxpayers faring well compared to EU counterparts
                                                  • Figure 21: Average level of net salary received by residents of a given country, EU15, 2010
                                              • Strengths and Weaknesses

                                                • Strengths
                                                  • Weaknesses
                                                  • Who’s Innovating?

                                                    • Key points
                                                      • Retailers expanding own-label product ranges
                                                        • Banks assisting customers with money matters
                                                          • New product launches focusing on ‘economy’ ranges
                                                            • Figure 22: New product launches, economy and premium, number of variants, 2004-10*
                                                        • Consumer – How Shopping Habits Have Changed

                                                          • Key points
                                                              • Figure 23: Ways in which shopping habits have changed in the last 12 months, RoI and NI, July 2010
                                                            • Consumers aged 25-49 cutting discretionary spend
                                                                • Figure 24: Consumers who have cut back on discretionary spending (eg clothes, DVDs etc), by gender and age, NI and RoI, July 2010
                                                              • Housewives, in particular, are trading down
                                                                • Figure 25: Agreement with selected statements in relation to how shopping habits have changed in the past 12 months, RoI and NI, July 2010
                                                              • Consumers aged 16-24 and 65+ remaining loyal to brands
                                                                  • Figure 26: Agreement with the statement ‘I’ve been buying less premium brands’, by age, NI and RoI, July 2010
                                                                • No change for over-65s
                                                                    • Figure 27: Agreement with statement ‘My spending habits haven’t really changed’, by age, NI and RoI, July 2010
                                                                  • Even those in full-time employment postponing purchases
                                                                      • Figure 28: Agreement with statement ‘I’ve postponed major purchases (eg car) in the past 12 months’, by working status, NI and RoI, July 2010
                                                                    • Discounts an effective way to encourage spending
                                                                        • Figure 29: Agreement with statement ‘I have taken advantage of major discounting on big-ticket items (eg HDTV)’, by working status, NI and RoI, July 2010
                                                                      • Debt reduction a focus for consumers aged 25-49
                                                                          • Figure 30: Agreement with ‘I’ve tried to reduce my level of debt (eg credit cards, store cards, personal loans)’, by age, NI and RoI, July 2010
                                                                      • Consumer – Where Has Spending Been Cut?

                                                                        • Key points
                                                                            • Figure 31: Areas where consumers have cut back on spending in the last 12 months, RoI and NI, July 2010
                                                                          • Leisure and socialising deemed expendable
                                                                              • Figure 32: Leisure- and entertainment-related areas where consumers have cut back on spending in the last 12 months, NI and RoI, July 2010
                                                                            • Women cutting back most on dining out
                                                                                • Figure 33: Consumers who have cut back on spending on dining out in the last 12 months, NI and RoI, July 2010
                                                                              • Young, male consumers turning their backs on the pub
                                                                                  • Figure 34: Consumers who have cut back on spending on entertainment/socialising in the last 12 months, NI and RoI, July 2010
                                                                                • Families targeting holiday spend for cutbacks
                                                                                    • Figure 35: Consumers who have cut back on spending on holidays in the last 12 months, NI and RoI, July 2010
                                                                                  • Spending on clothing cut by almost half of consumers
                                                                                      • Figure 36: Consumers who have cut back on spending on clothing/accessories in the last 12 months, by age and gender, NI and RoI, July 2010
                                                                                    • Consumers opting for cheaper clothing options
                                                                                      • Younger consumers cutting back on books/DVDs/music
                                                                                          • Figure 37: Consumers who have cut back on spending on books/DVDs/music in the last 12 months, by age, NI and RoI, July 2010
                                                                                        • Women trading down when grocery shopping
                                                                                            • Figure 38: Consumers who have cut back on spending on groceries in the last 12 months, by gender, NI and RoI, July 2010
                                                                                          • More than a quarter cutting spending on the home
                                                                                              • Figure 39: Consumers who have cut back on spending on home improvements in the last 12 months, by age, NI and RoI, July 2010
                                                                                          • Consumer – Priorities when Situation Improves

                                                                                            • Key points
                                                                                              • Holidays the biggest single post-recession ‘wish’
                                                                                                • Figure 40: Key priorities if financial/spending situation improves over the next 12 months, RoI and NI, July 2010
                                                                                                • Figure 41: Consumers for whom ‘being able to take more holidays’ is a key priority if the finance situation/spending improves over the next 12 months, by working status, NI and RoI, July 2010
                                                                                              • Financial issues weighing heavily on consumers’ minds
                                                                                                  • Figure 42: Key finance-related priorities if finance/spending situation improves over the next 12 months, NI and RoI, July 2010
                                                                                                • C2DEs in NI hoping to regain control over day-to-day finances
                                                                                                    • Figure 43: Demographics most inclined to cite ‘being able to manage paying my bills more comfortably’ and ‘managing my finances and spending better’ as key priorities if finance situation/spending improves over the next 12 months, NI and RoI, July 2010
                                                                                                  • ABC1s keen to resume long-term financial planning
                                                                                                      • Figure 44: Demographics most inclined to cite ‘having enough funds to start making long-term financial plans (eg pension)’ and ‘being able to catch up on debt repayments (eg. loans, mortgages)’ as key priorities if finance situation/spending improves over the next 12 months, NI and RoI, July 2010
                                                                                                    • Debt arrears troubling consumers aged 25-34 in employment
                                                                                                      • Younger consumers looking forward to ‘nights out’
                                                                                                          • Figure 45: Consumers for whom ‘being able to go out more’ is a key priority if the finance situation/spending improves over the next 12 months, by age, NI and RoI, July 2010
                                                                                                      • Consumer Target Groups

                                                                                                        • Key points
                                                                                                          • NI target groups
                                                                                                            • Figure 46: Consumer typologies, NI, July 2010
                                                                                                          • Comfort Seekers
                                                                                                            • Characteristics
                                                                                                              • Who are Comfort Seekers?
                                                                                                                • Understanding Comfort Seekers
                                                                                                                  • Holiday Makers
                                                                                                                    • Characteristics
                                                                                                                      • Who are Holiday Makers?
                                                                                                                        • Understanding Holiday Makers
                                                                                                                          • Finance Thinkers
                                                                                                                            • Characteristics
                                                                                                                              • Who are Finance Thinkers?
                                                                                                                                • Understanding Finance Thinkers
                                                                                                                                  • Kid Treaters
                                                                                                                                    • Characteristics
                                                                                                                                      • Who are Kid Treaters?
                                                                                                                                        • Understanding Kid Treaters
                                                                                                                                          • RoI target groups
                                                                                                                                            • Figure 47: Consumer typologies, RoI, July 2010
                                                                                                                                          • Holiday Enthusiasts
                                                                                                                                            • Characteristics
                                                                                                                                              • Who are Holiday Enthusiasts?
                                                                                                                                                • Understanding Holiday Enthusiasts
                                                                                                                                                  • Bill Payers
                                                                                                                                                    • Characteristics
                                                                                                                                                      • Who are Bill Payers?
                                                                                                                                                        • Understanding Bill Payers
                                                                                                                                                          • Finance Managers
                                                                                                                                                            • Characteristics
                                                                                                                                                              • Who are Finance Managers?
                                                                                                                                                                • Understanding Finance Managers
                                                                                                                                                                  • Social Creatures
                                                                                                                                                                    • Characteristics
                                                                                                                                                                      • Who are Social Creatures?
                                                                                                                                                                        • Understanding Social Creatures
                                                                                                                                                                        • Appendix

                                                                                                                                                                          • Consumer data
                                                                                                                                                                            • Figure 48: Ways in which shopping habits have changed in the past 12 months, by demographics, NI, July 2010
                                                                                                                                                                            • Figure 49: Ways in which shopping habits have changed in the past 12 months, by demographics, NI, July 2010
                                                                                                                                                                            • Figure 50: Areas consumers have cut back on spending in the last 12 months, by demographics, NI, July 2010
                                                                                                                                                                            • Figure 51: Areas consumers have cut back on spending in the last 12 months, by demographics, NI, July 2010
                                                                                                                                                                            • Figure 52: Key priorities if finance situation/spending improves over the next 12 months, by demographics, NI, July 2010
                                                                                                                                                                            • Figure 53: Key priorities if finance situation/spending improves over the next 12 months, by demographics, NI, July 2010
                                                                                                                                                                          • RoI
                                                                                                                                                                            • Figure 54: Ways in which shopping habits have changed in the past 12 months, by demographics, RoI, July 2010
                                                                                                                                                                            • Figure 55: Ways in which shopping habits have changed in the past 12 months, by demographics, RoI, July 2010
                                                                                                                                                                            • Figure 56: Areas consumers have cut back on spending in the last 12 months, by demographics, RoI, July 2010
                                                                                                                                                                            • Figure 57: Areas consumers have cut back on spending in the last 12 months, by demographics, RoI, July 2010
                                                                                                                                                                            • Figure 58: Key priorities if finance situation/spending improves over the next 12 months, by demographics, RoI, July 2010
                                                                                                                                                                            • Figure 59: Key priorities if finance situation/spending improves over the next 12 months, by demographics, RoI, July 2010
                                                                                                                                                                          • Typologies data
                                                                                                                                                                            • NI
                                                                                                                                                                              • Figure 60: Consumer typologies, by demographics, NI, July 2010
                                                                                                                                                                              • Figure 61: Ways in which shopping habits have changed in the past 12 months, by typology, NI, July 2010
                                                                                                                                                                              • Figure 62: Areas consumers have cut back on spending in the last 12 months, by typology, NI, July 2010
                                                                                                                                                                              • Figure 63: Key priorities if finance situation/spending improves over the next 12 months, by typology, NI, July 2010
                                                                                                                                                                            • RoI
                                                                                                                                                                              • Figure 64: Consumer typologies, by demographics, RoI, July 2010
                                                                                                                                                                              • Figure 65: Ways in which shopping habits have changed in the past 12 months, by typology, RoI, July 2010
                                                                                                                                                                              • Figure 66: Areas consumers have cut back on spending in the last 12 months, by typology, RoI, July 2010
                                                                                                                                                                              • Figure 67: Key priorities if finance situation/spending improves over the next 12 months, by typology, RoI, July 2010

                                                                                                                                                                          Companies Covered

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                                                                                                                                                                          Reaction to the Recession - Changes in Shopping Behaviour - Ireland - November 2010

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