Consumers expect this Christmas to be much more expensive
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Nearly three-quarters of Irish adults are expecting Christmas shopping to be significantly more expensive this year with one-third already expecting to spend less this year, a new survey by accountancy firm KPMG shows.
As cost-of-living challenges persist, Irish consumers are expected to be more conscious of their spending this festive season.
According to the latest KPMG Next Gen Retail Survey, which was conducted on over 1,000 adults, 72% of shoppers expect Christmas shopping to be significantly more expensive this year — compared to 70% in 2023.
Over half of people, 54%, said they are more likely to give people smaller gifts this year because of the cost-of-living challenges.
It found that 36% expect to spend less this Christmas compared to last year. Of those intending to spend less this year, 52% said it was because they have less disposable income.
It is not just Christmas shopping that will be impacted by these considerations as 56% of people also said they will reduce their spending in restaurants and pubs. Irish shoppers are cutting back in other areas of life not just in anticipation of the busy Christmas period.
The survey showed that half have already cut back and bought fewer things over the last year while 46% have purchased more products on promotion or discounted, or used loyalty schemes, and bought more own-brand products.
In addition, 45% of consumers said they will be looking at the deals on offer during Black Friday and Cyber Monday online later this month while 38% plan to do so in store.
Head of retail at KPMG Keith Watt said that price is still the “primary factor” influencing consumers when choosing where to shop with 52% ranking it as a “crucial consideration”.
“Our findings suggest that this Christmas will be marked by careful budgeting and a stronger emphasis on value, presenting retailers with challenges and opportunities to meet the needs of Irish shoppers,” he said.
“Retailers that adapt by offering compelling deals, efficient online experiences, and in-store options will be best positioned to attract the holiday spend."
Mr Watt added that retailers should remain “cautiously optimistic” despite the results of the survey pointing to Central Statistics Office retail data for September which showed sales volume up 0.7% year-on-year.
“With easing inflation, a strong labour market, and rising real incomes, there's positive momentum for retail as the busiest time of the year approaches,” he said.
In terms of other shopping trends, the survey also revealed that 87% of people see “value for money” as their top shopping priority followed by quality at 70% and customer service at 45%.
In-store shopping retains a strong appeal for Irish consumers with 62% saying they prefer to see items in person before buying. However, online shopping continues to grow, with 53% of people considering it generally cheaper than in-store options.
On the issue of sustainability, the survey revealed that Irish shoppers are becoming more demanding of retailers and with brands to take more meaningful action.
Most people, 77%, reported using the Deposit Return Scheme, and more than half, 54%, say brands should go beyond being sustainable and take responsibility for reversing environmental damage.