The cost of living crisis in Ireland continues to reshape consumer spending, emphasizing frugality and essential purchases. Consumers are choosing cheaper utilities, homemade meals, and discounts, adapting to inflation while hoping for post-pandemic relief.
This report looks at the following areas:
- The impact of the rising cost of living on consumersÂ’ financial wellbeing and confidence.
- How consumers have changed everyday behaviours in response to high inflation, and what they expect to do in the months ahead.
- What areas of spending consumers are most keen to prioritise in the face of cost of living issues.
- The level of concern about rising interest rates, attitudes towards government support measures, and the changes in how consumers are searching for products and considering value.
- Consumer attitudes towards the cost of living crisis, including support for businesses, and changes in the perceived importance of ethical and environmental standards.
In the face of Ireland’s ongoing crisis, consumers continue to pivot towards frugality and essential spending, significantly reshaping market dynamics.
Sam Fryers, Research Analyst – Ireland
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Executive Summary
- Key issues covered in this Report
- Overview
- Opportunities
- Expand the limits of payment flexibility
- Explore saving options within brand communities
- Combat the digital divide developing in financial services
- Market dynamics and outlook
- Annual inflation difference falls below 2.5%, prompting base rate change
- Graph 1: CPI annual inflation rate for all items, Jun 2021-24
- Outlook on current financial situation has improved
- Graph 2: how consumers rate their current financial situation compared to 12 months previously
- High cost of living and its impact on social issues
- What consumers want and why
- What you need to know
- Consumer trends: key takeaways
- Gen Z highly responsive to everyday money saving opportunities
- Graph 3: Agreement with statements relating to saving money, 2024
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Market Dynamics
- Market drivers
- Consumer prices continue to reach unprecedented levels
- Graph 4: consumer price index for all items, June 2021-24
- Annual inflation difference falls below 2.5%
- Graph 5: CPI annual inflation rate for all items, Jun 2021-24
- Major banks set to lower base rates
- Graph 6: interest rates, actual, forecasted and projected, ECB and BoE 2023-25
- Fuel and food costs have mainly plateaued
- Graph 7: consumer price index for food items, June 2021-24
- Graph 8: consumer price index for fuel and energy, June 2021-24
- Financial wellbeing index shows healthy finances are becoming more common
- Graph 9: financial wellbeing index, April 2022-June 2024
- Fewer consumers claiming to be worse-off
- Graph 10: how consumers rate their financial situation to 12 months ago, Aug 2022-May 2024
- Nearly three quarters still impacted by food and drink price increases
- Graph 11: issues faced over the last two months, 2024
- Rental costs and energy costs cause the most worry
- Graph 12: extent of worry about selected issues affecting household finances over the next two months, 2024
- Graph 13: extent of worry about selected issues affecting household finances over the next two months, 2024
- Economists warn that rental costs in RoI may continue to increase well into 2024…
- …and housing dissatisfaction dominates monthly poll
- Improved finances would see most still add to their savings
- Graph 14: spending priorities if financial situation were to improve, 2024
- Unemployment rate in RoI grows by 0.2% in May-June
- Strong wage growth in NI
- Government support in RoI to help with cost of living pressures
- Government support in NI to help with cost of living pressures
- Financial and work insecurity is impacting mental health, finds NI Health Survey
- Mind matters: de-stressing food and drink products become more established in the marketplace
- Theft has continually risen in RoI since the beginning of the crisis
- Graph 15: number of reported incidents relating to theft, 2019-24
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What Consumers Want and Why
- Changes in consumer behaviour
- More than four in every five have made changes to spending in the last two months
- Socio-economic groups deal with reduced spend differently
- Gen Z look to commuting and lunches to save
- Budgeting inactivity increases with age…
- Graph 16: consumers who did nothing to save money in the last two months, by generation, 2024
- …despite Gen X ranking among the least financially healthy age groups
- Women showing supermarket-savvy…
- Graph 17: changes made in the last two months, by gender, 2024
- Graph 18: changes made in the last two months, by gender, 2024
- …men could do with more assistance
- Despite struggles, barriers prevent more widespread change of mobile provider
- Changes on last year suggests loosening pressure on day-to-day expenditure
- Graph 19: changes made in the last two months, 2023-24
- Changes in consumer spending
- RoI: savings to be prioritised over the coming year
- Graph 20: changes in consumer spending, 2024
- NI: In-home entertainment significantly valued in NI
- Graph 21: changes in consumer spending, 2024
- The cost of living crisis has had a sizeable impact across multiple industries
- Graph 22: what consumers spend money on over the course of a year, 2023 and 2024
- Graph 23: what consumers spend money on over the course of a year, 2023 and 2024
- Holiday spend shows resilience…
- …leverage travel and leisure to entice reluctant Baby Boomer market
- Graph 24: consumers with Holiday Spending as a top three priority if financial situation meant cuts in overall spending, by generation, 2024
- The night-time economy will suffer if finances worsen
- Graph 25: changes in consumer spending, 2024
- Millennials most at risk from finance-based social sacrifices …
- …brands can use group discounting to encourage social moments
- Attitudes towards inflation
- Inflation continues to make consumers price-savvy
- Graph 26: agreement with statements relating to the cost of living, 2024
- Strong demand for comparison tools and tiered pricing strategies
- Combating ‘wait and see’ attitudes towards big-ticket purchases
- Graph 27: consumers putting off plans to replace big-ticket items, by financial situation, 2024
- Advise home workers on how to stay at home…
- …by making it more affordable
- Elevate the value and convenience associated with product longevity and durability
- Government intervention on personal finances underwhelms, particularly in NI…
- Graph 28: consumer response to whether the government’s support measures will help their financial situation, 2024
- …highlighting the urgent need for clear communication between the Government and its citizens
- Government support not well received by NI’s Gen X and Baby Boomers
- Graph 29: consumer who say the government’s support measures will be a big help to their financial situation, by generation, 2024
- Attitudes towards businesses and the cost of living
- Consumers have a conflicting view on businesses
- Graph 30: statements relating to businesses and the cost of living, 2024
- Graph 31: statements relating to businesses and the cost of living, 2024
- Still high, but growing confidence suggests some degree of adaptation to inflation
- Most think households should be prioritised over businesses
- Graph 32: response to a statement that households should be prioritised for financial support over businesses, 2024
- Localism offers some protection to local brands
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Competitive landscape
- Innovations
- AI assistance could help to connect bargain hunters with business
- Supporting those in food poverty
- Irish consumers respond to social care
- Eye-catching advertising to appeal to the budget conscious
- Changing portion sizes to reduce waste
- Inflation proofing
- Ultimate night-in value offering
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Appendix
- Report scope and definitions
- Abbreviations and terms
- Consumer research methodology
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