Home Directory Deloitte Ireland LLP One in four people are concerned about making upcoming payments – Deloitte

One in four people are concerned about making upcoming payments – Deloitte

Sustained increase in those worried about rising costs of everyday items

Four in five people are reporting concerns about the rising costs of everyday items in Ireland, a 6% increase on last month, while an extra 3% of people are now worried about making upcoming payments, according to Deloitte’s State of the Consumer Tracker. Overall consumer spending is up for the fourth wave in a row, by €31 to an average spend of €2,608 per month. The number of those surveyed who think groceries are now more expensive jumped 7% to 67%, while the number of those who believe restaurant prices are higher - as restrictions were finally removed in full last month - grew by 8% to 48%. Only 8% of consumers are not concerned about inflation.

Deloitte’s State of the Consumer Tracker is a monthly survey which tracks Irish 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 January 27 and February 1 last.

Commenting on the latest results, Daniel Murray, Partner and Head of Consumer at Deloitte Ireland, said: “Given rapidly rising inflation in a host of sectors, and significantly increased fuel, electricity and heating bills, many people are feeling the pinch. The Government are acting to mitigate some of the impact in the shorter term but given that energy prices are not likely to drop in the foreseeable future - particularly with the unstable geo-political situation between Russia and Ukraine - and that materials costs are increasing in many industries, the impact is being felt across the economy.
“On the positive side however, safety concerns related to Covid-19 have significantly receded. There have been double digits rises across the board in terms of consumer confidence to undertake ’normal activities’ again, such as attending in person events or taking a flight. This is to be welcomed, as many businesses seek to gain ground in 2022.”

Consumer Confidence
While consumer spending is up marginally for the fourth wave in a row, 53% of those surveyed are concerned about the amount of money they have saved (up 2%). Housing remains the largest proportion of spend at an average of 22% - up 3% on the last wave - while just under half of consumers are delaying large purchases. Furthermore, financial stress is the primary driver of global anxiety (47%) with 54% of respondents in Ireland also putting it top of the rankings.
Despite the growing concerns about the cost of everyday living, a cohort of respondents are showing signs of optimism, particularly those aged 18-34. There has been a 5% increase in those feeling optimistic that the financial situation will improve within three years and 43% of consumers report spending more to enjoy today (up 2%.) Spending across all the main categories is stable including groceries, clothing, restaurants, healthcare, electronics and entertainment.

The month’s wave saw a 6% increase in those reporting concerns around rising prices of everyday items, which is now 80% of those surveyed - compared to a global average of 72%. Alcohol and tobacco, groceries and restaurants were all too perceived to have seen the largest hikes in price this month, compared to last month.
The online share of spending remains constant, with slight fluctuations in the categories of electronics, up 2% to 40%, and restaurants down 3% to 31%. Millennials, followed closely by those with Covid safety concerns, are driving this online trend.

Travel & Hospitality
Safety concerns around Covid-19 have dropped dramatically versus last month. Feeling safe staying in a hotel saw the biggest increase in perceived safety - up 22% to 70%. There are increases across the board in consumers planning to travel for leisure in the next three months with the most notable: a 16% increase (to 55%) in those planning to stay in a hotel in the next three months, attend in-person events is up 21% (to 53%) and a 14% increase (to 37%) in people planning to take an international flight in the same period. Of the 7% of those surveyed who would like to travel for business in the next quarter, one-in-five wanted to do so to build and develop their client relationships abroad.

The number of those planning to buy a car in the next six months dropped by 2% to 20%, with one-in-four citing high maintenance costs of their vehicle as the reason for this. The number of those who want a more fuel-efficient vehicle is up 3% to 11%. Only one-in-12 people have plans to switch an electric car, while ‘driving something different’ as a motive for wanting to change car, dropped by 7% to 19%, in this wave.