The vast majority of Irish consumers remain concerned about the cost of living crisis with higher prices driving them towards own-brand products in greater numbers, according to new research from EY.
How Irish consumers shop has been reshaped, with price now firmly the main consideration, according to the EY’s Future Consumer Index which surveyed more than 20,000 consumers across 26 countries, including more than 500 in Ireland.
With global economic uncertainty set to persist and price levels not expected to return to pre-pandemic levels, these behavioural shifts are unlikely to be temporary but instead signal a lasting reset in consumer priorities, the research suggests.
On a positive note for Irish retailers, in-store shopping for everyday items remains resilient while health and sustainability are high priorities for consumers and of increasing importance for businesses seeking to entice them and differentiate their product offering.
Financial concerns continue to dominate the Irish consumer mindset, with 96 per cent concerned with the cost of living and 92 per cent with their own personal finances.
Unsurprisingly, price has emerged as the primary driver of consumer purchasing in Ireland and has prompted a shift in shopping habits to find better value.
Almost half of Irish shoppers rely on discount shops to make their budgets go further while a similar number plan to hold out for sales or join loyalty programmes to secure better value.
Budget sensitivity has shifted the perception of ‘own brand’ products which were once seen as the second choice on the shelves.
All told 78 per cent of Irish consumers are more likely to say that private label goods meet their needs just as well as branded products compared with 67 per cent globally.
The sentiment varies by category and while private labels are making strides in fresh food, confectionery and processed cupboard staples, branded goods continue to dominate in beauty and alcohol – categories where image, experience and indulgence remain important.
Cost-conscious consumers have become more wary of “shrinkflation”, where products are reduced in size but prices stay the same, and sceptical of overly generous promotions with 48 per cent saying new product improvements are often the result of cost-cutting rather than genuine enhancements for the customer.
Amid the anxiety, however, there is some optimism with 54 per cent of consumers believing they will be better off in 12 months, compared to just 19 per cent who think they will be worse off.
“Consumer behaviour has traditionally shifted during economic uncertainty and periods of acute price inflation, but today’s changes appear to be more fundamental,” said EY’s Colette Devey.
“Unlike past cycles – where consumers returned to familiar brands post-crisis – prolonged inflation, supply chain disruptions and geopolitical instability would seem to be reshaping habits permanently. ”
