Majority of Irish consumers delaying large purchases due to financial concerns – Deloitte Ireland Report

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Majority of Irish consumers delaying large purchases due to financial concerns – Deloitte Ireland Report

Inflation concerns rise to 86% - the third highest rate of 23 countries surveyed

The number of people in Ireland delaying large purchases has increased by 5% in the last month to 52%, while the amount of those concerned about the rising cost of everyday prices has jumped another 4% to 86%, according to Deloitte’s State of the Consumer Tracker.

More than 40% of those surveyed are extremely concerned that Russia’s invasion of Ukraine will impact their everyday lives, with a further 27% showing moderate concern – meaning this is an issue for almost seven in 10 people living here, the survey shows.

Over 40% of people also stated that the war has had a moderate to major impact on their plans to travel internationally, while roughly the same number believe it has majorly impacted the price they pay for groceries. In addition, over 90% of consumers said it has had a significant impact on the price they pay to fuel their cars.

Deloitte’s State of the Consumer Tracker is a monthly survey which tracks consumers’ attitudes towards personal wellbeing, financial concerns, travel and hospitality, transport, and retail. The results are based on a survey of over 20,000 consumers across 23 countries (1,000 Irish consumers). The most recent data was gathered between and March 24th and March 30th last.

Commenting on the latest results, Daniel Murray, Deloitte Ireland, Partner and Head of Consumer, said: “This is the first tracker where the full impact of the war in Ukraine is evidently affecting consumer sentiment, along with both purchasing power and spending decisions.

“The terrible ramifications of the situation in terms of its human cost, is of course the primary concern. However, given its broader political and economic effects globally, the invasion is having a much wider impact across society - not least on global supply chains and rising costs of production and goods. People in Ireland are really feeling this impact.

“However, two in three people plan to spend on leisure travel in the next four weeks – which should benefit the domestic economy – and one in five people plan to buy a car in the next six months, with a 5% increase in those intending to purchase an electric model, which may be due to the huge jump in petrol and diesel prices.”

Consumer Confidence
Average consumer spending is now €2,654, an increase of €123 on the last wave of the survey, and the largest fluctuation in the series since Sept 2021. Spending on both less, and more, discretionary items has increased - by €59 and €42, respectively.

Financial concerns are continuing to escalate with those planning to delay large purchases increasing for the second time in a row, while the number of people optimistic that the financial situation will improve within three years dropped by 5% to 43%. There was also a 2% drop, to 42%, of those reporting they are spending more to enjoy today, while those concerned about making an upcoming payment remained static at 28%.

Retail
The number of consumers spending more on goods versus experiences is down 4%, for the fourth wave in a row (now 35%). There are also large increases in those reporting concern about the rise in everyday prices, with consumers perceiving higher prices relative to the previous month. These include categories such as groceries (up 7% to 82% and perceived to have had the sharpest rise); restaurants (up 7% to 68%); alcohol and tobacco (up 5% to 71%) and apparel and footwear (up 5% to 53%).

Travel & Hospitality
Covid-19 safety concerns are plateauing, with slight decreases in safety perceptions in areas such as going to a store (down 5% to 74%), attending in-person events (down 2% to 56%) and taking a flight (down 2% to 55%).
There are increases across the board in consumers planning to travel for leisure in the next three months with most notable increases including: hotels visits (up 3% to 63%), international flights (up 3% to 44%) while 54% of consumers said they would like to travel for business (up 1%), within that timeframe.

Transport
More than over one in five people plan to change their car in the next six months, aligning with last month’s figures, but more of these are now planning to purchase electric cars – up 5% to 12%. Of those purchasing, 37% plan to buy a new vehicle, and high maintenance costs are one of the key reasons for this (up 4% to 24%).

About the State of the Consumer Tracker
This monthly study is fielded using an online panel where consumers 18 years of age and older are invited to complete the survey (translated into local languages) via email. It is fielded in 23 countries (targeting 1,000 respondents per country/wave). The survey field period was 24 to 30 March 2022.

Article Published: 21/04/2022