KPMG has released that retail survey with key findings indicating how consumer behavior may change during the coming months.
The KPMG survey of consumer retail attitudes was conducted by Red C at the end of October.
The key findings from the survey / research study were:
- 72 percent of survey respondents expect Christmas shopping to be more expensive this year
- Over 1 in 3 (36 percent) intend to spend less this Christmas
- Over half (52 percent) will spend less on Christmas shopping this year, due to having less disposable income
- 54 percent of consumers are more likely to give people smaller gifts this year because of cost-of-living challenges
- Nearly 6 in 10 (56 percent) will reduce their spending in restaurants and pubs
- Majority (77 percent) use the Deposit Return Scheme
Irish consumers are preparing for a more “challenging” Christmas this year as the impact of the cost-of-living crisis continues to be felt.
The KPMG Next Gen Retail Survey reveals that “most (72 percent) Irish shoppers expect Christmas shopping to be significantly more expensive this year, compared to 70 percent in 2023.”
Over one in three (36 percent) expect to spend “less this Christmas compared to last year.”
Keith Watt, Head of Retail at KPMG, said that price is still the primary factor influencing consumers when “choosing where to shop, with 52 percent ranking it as a crucial consideration.”
Watt added that their 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.”
Watt also mentioned that retailers that adapt by “offering compelling deals, efficient online experiences, and in-store options will be best positioned to attract the holiday spend.”
The research also highlights shifting spending habits, with “more than half (52 percent) planning to reduce their Christmas shopping budgets and 56 percent intending to cut back on dining out to save money.”
The sizable proportion of 18-34s (30 percent) who plan “to fund Christmas via credit facilities is of concern.”
Additionally, nearly half (45 percent) of respondents say they’ll “look for Black Friday and Cyber Monday deals online, while 38 percent plan to do so in-store. Over half (54 percent) expect to give smaller gifts this year due to cost of living pressures.”
Keith Watt added that Irish shoppers may be tightening their belts this Christmas, but retailers “should remain cautiously optimistic.”
Recent CSO data shows “retail sales (excluding car sales) the monthly volume of retail sales was up by 0.7 percent in September.”
Watt also noted that with easing inflation, a “strong” labor market, and rising real incomes, there’s “positive momentum for retail as the busiest time of the year approaches.”
Despite the convenience of online shopping, in-store shopping retains a strong appeal for Irish consumers “who appreciate the ability to shop for items in-store.”
Their research reveals that “6 in 10 (62 percent) of adults prefer shopping in-store to see and feel products before buying, highlighting the sustained importance of physical experiences.”
This is mirrored in Europe, where European retailers are investing in physical shops to stimulate “online and offline sales as they face increasing competition from giant e-commerce companies.”
They also want to take advantage of shoppers’ “renewed interest in visiting shops.”
As noted in the report, Irish shoppers continue to “feel the pinch, with many cutting spending throughout the year.”
The report pointed out that half have “cut back and bought fewer items, while 46 per cent have purchased more products on promotion or discounted, used loyalty schemes, and bought more own-brand products. Of particular interest are the 40 per cent of those under 45 who have cancelled subscriptions over the past year.”
The research report further revealed that a level of uncertainty continues to exist around AI, with “only 1 in 5 believing AI will improve the online and in-person shopping experience.”
The report concluded that less than “a third (31 percent) believe AI will transform how consumers purchase products and services while one-quarter think AI will help reduce fraudulent transactions.”
