Irish consumers are increasingly concerned about the rising cost of Christmas shopping, with 7 in 10 adults expecting their Christmas shopping to be more expensive this year. Price is still the primary factor influencing consumers when choosing where to shop, with 68 percent ranking it as a crucial consideration, compared to 65 percent last year.
The latest KPMG Next Gen Retail Survey also reveals that 63 percent of consumers will be giving smaller Christmas gifts this year, because of cost-of-living challenges, and 45 percent will be more likely to give some people cash or vouchers to spend rather than a traditional gift.
Keith Watt, Head of Retail
Concerns about the affordability of Christmas shopping
Like 2022, our survey indicates continued concerns about the affordability of Christmas shopping this year, with 70 percent of adults expecting it to be more expensive than in 2022 and 62 percent saying these increased costs will make the holiday season more stressful to them.
This year, 58 percent of consumers will reduce their Christmas shopping spending due to less disposable income and higher prices. While 6 in 10 have or will be reducing their spending in restaurants and pubs, compared to last year, to save costs.
Attitudes towards Christmas shopping
Source: KPMG Next Gen Retail Survey
Increase in price
70%
of survey respondents expect Christmas shopping to be significantly more expensive this year
Reduction in social spend
60%
of survey respondents will be reducing their spend in restaurants and pubs this Christmas
Cost-of-living crisis
Keith Watt, Head of Retail at KPMG, said: "The long-term impact of the cost-of-living crisis has diminished consumer purchasing power, but it appears Irish shoppers are still planning to spend more at Christmas by sacrificing other things. Our research shows nearly half of all adults (46 percent) will actively plan to seek online deals on Black Friday and Cyber Monday. While these days are vital for retailers and for shoppers seeking to take advantage of the discounts available, customers are becoming even more price conscious and researching before buying any deal."
As a response, 45 percent will shop online more often to find better deals, and 3 in 10 have either started or intend to begin their Christmas shopping earlier than usual this year due to concerns about product shortages.
Younger cohorts are more concerned about product shortages and more likely to participate in savings clubs or use credit facilities in preparation for Christmas shopping. Despite concerns about product shortages, less than 1 in 5 consumers has had difficulty finding products in stock.
Consumers planning to spend more on gifts than food
Regarding budget allocation, consumers plan to spend more on gifts than food for the Christmas season. The average food shop spend is estimated at €254.70, while the average gift shop spend will be €407.40.
Those aged 35-54 have a bigger budget for gift shopping than most, planning to spend €475 on gifts and €277 on food. In contrast, those aged 18-24 are more conservative with their budgets, estimating €261.60 on gifts and €193 on food.
35–44-year-olds and females are most likely to start Christmas shopping early, while 6 percent of shoppers avoid all the stress and don’t do any Christmas shopping.
Consumer shopping preferences are largely unchanged
The shopping behaviours of consumers in Ireland have remained the same since the total lift of Covid regulations in early 2022 and most expect their shopping behaviours to remain the same over the coming 12 months.
Groceries remain the least likely category to be shopped online, while clothes and gifts drive online purchasing. The majority (85 percent) of consumers still prefer to buy groceries in-store, and 58 percent opt for in-store shopping for homeware.
However, 28 percent of consumers prefer to purchase clothes/fashion online, and 26 percent choose to buy gifts online, with younger cohorts showing a higher likelihood of shopping online across various categories.
Most consumers (43 percent) still prefer to shop at large shopping centres, an increase from 40 percent in 2022, followed by 27 percent who prefer to shop locally and city centres remain unchanged at 16 percent.
Credit and debit cards remain preferred payment method
Our survey reveals nearly 2 in 5 Irish adults prefer to use credit and debit cards as their most preferred method of payment, followed by 34 percent using cash, 15 percent using mobile payments like Apple/Android pay, and 1 in 10 Irish shoppers use Revolut as their preferred payment method for shopping online and sending money to/from friends and family.
Attitudes to online shopping remain stable
Under 35s are more likely to buy more often across all channels, whilst over 55s less likely to use online for any part of the buying journey. Those under 35 also view online shopping as a more convenient and cost-effective way to buy goods.
While over half of consumers (54 percent) agree that buying products online is cheaper, more than 60 percent still prefer to buy in-store to see and feel the product before making a purchase. Approximately 41 percent of consumers admit to occasionally abandoning online transactions due to complicated or lengthy website navigation and payment forms.
Attitudes towards online shopping
Source: KPMG Next Gen Retail Survey
In-person shopping
62%
of survey respondents prefer to shop in a physical store as they can touch and see the products
Price as priority
54%
of survey respondents say it is cheaper to buy products online than in a store
Get in touch
Do you have any queries about the findings of our KPMG Next Gen Retail survey, or the impacts for your business? Our team of seasoned industry specialists is here to empower your business with invaluable advice and solutions.
Contact Keith Watt of our Retail and Manufacturing team; we'd be delighted to hear from you.
Keith Watt
Partner, Head of Retail & Manufacturing
KPMG in Ireland
