Almost two in three Irish consumers will cut their spend on Christmas presents this year as they continue to grapple with cost-of-living challenges, according to a new report by KPMG.
The latest KPMG Next Gen Retail Survey, which was carried out in October and involved a State-wide representative sample of more than 1,000 people, shows 70 per cent of people expect prices for Christmas shopping items to rise this year.
About 62 per cent said these increased costs will make the holiday season more stressful. Price is still the primary factor influencing consumers when choosing where to shop, as 68 per cent ranked it as a crucial consideration, compared with 65 per cent last year.
The report also revealed that 63 per cent of consumers will be giving smaller Christmas gifts this year, because of cost-of-living challenges, while 45 per cent will be more likely to give some people cash or vouchers to spend rather than a traditional gift.
This year, 58 per cent of consumers will reduce their Christmas shopping spending due to higher prices and having less disposable income. Meanwhile, six in 10 have or will be reducing their spend in restaurants and pubs compared with last year to save costs.
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KPMG head of retail Keith Watt said: “The long-term impact of the cost-of-living crisis has diminished consumer purchasing power, but it appears Irish shoppers are still planning to spend more at Christmas by sacrificing other things.
“Our research shows nearly half of all adults (46 per cent) will actively plan to seek online deals on Black Friday and Cyber Monday.
“While these days are vital for retailers and for shoppers seeking to take advantage of the discounts available, customers are becoming even more price conscious and researching before buying any deal.”
The report also showed the average food shop spend is estimated at €254.70, while the average gift shop spend will be €407.40.
The report suggests shopping behaviours of consumers in Ireland have remained the same since the lift of Covid-19 regulations in early 2022, and most expect their shopping behaviours to remain the same over the coming 12 months.
Groceries remain the least likely category to be shopped for online, while clothes and gifts drive online purchasing. A majority (85 per cent) of consumers still prefer to buy groceries in-store, while 58 per cent opt for in-store shopping for homeware.
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However, 28 per cent of consumers prefer to purchase clothes and fashion products online, while 26 per cent choose to buy gifts online, with younger cohorts showing a higher likelihood of shopping online across various categories.
Separately, an EY report on global trends has found the cost of living (94 per cent) and climate change (89 per cent) top the bill for consumers who are now more intentional about what and when they buy.
The EY Future Consumer Index, which surveyed more than 22,000 consumers across 28 countries, showed more than half (54 per cent) of consumers are responding to their concerns by planning to buy less in the future.
This is for a number of reasons, including as part of an effort to save money (73 per cent); because they feel they don’t need new items (49 per cent); or as part of an effort to help the environment (39 per cent).
Fashion accessories topped the list of product categories consumers plan to spend less on (61 per cent), followed by toys and gadgets (51 per cent) and clothing and footwear (44 per cent).
