Retail survey - key findings
Our survey of consumer retail attitudes was conducted by Red C at the end of October. The key findings 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 shoppers may be tightening their belts this Christmas, but retailers should remain cautiously optimistic.
Impact of cost-of-living crisis
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 latest 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: "Price is still the primary factor influencing consumers when choosing where to shop, with 52 percent 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. 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: "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. 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."
In-store and online shopping preferences
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. Our 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.
However, online shopping continues to grow, with 53 percent of respondents considering it generally cheaper than in-store options. Yet, complex return processes remain a barrier, with over a quarter (27 percent) avoiding online shopping altogether due to return-related hassles.
As shoppers become more value-conscious amid economic pressures, the majority (87 percent) rate "value for money" as their top shopping priority, followed by quality at 70 percent and customer service at 45 percent. Notably, value for money is most critical among those over 55 (91 percent) but less so for younger shoppers aged 18–24 (75 percent).
Though online shopping provides flexibility, concerns persist with over a third (34 percent) expressing caution about purchasing from brands without physical stores, and 3 in 10 only return items if a physical location is available. Meanwhile, shoppers are becoming more demanding of brands, with over two-fifths (42 percent) expecting 24/7 accessibility to online brands, compared to 38 percent last year, reflecting a desire for greater convenience and reliability in digital shopping.
Shoppers continue to cut back
Irish shoppers continue to feel the pinch, with many cutting spending throughout the year. 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.
Meanwhile, 55 per cent of those over 55 have used retailer loyalty schemes to get lower prices, highlighting the different ways cost-cutting manifests through various generations.
Sustainability is key for brands
Irish shoppers are becoming more demanding of retailers regarding sustainability, with rising expectations on brands to take meaningful action. Most (77 percent) use the Deposit Return Scheme, and more than half (54 percent) say brands should go beyond being sustainable and take responsibility for reversing environmental damage.
There is also strong support (62 percent) for retailers to offer incentives like discounts to encourage eco-friendly or circular economy purchases. In comparison, nearly 6 in 10 (58 percent) want brands to provide greater transparency around their sustainability practices. Packaging waste remains a concern, with one in five (21 percent) respondents discouraged from shopping online due to environmental concerns about packaging.
However, even with increased awareness, only 3 in 1o consumers are willing to pay a higher price for more sustainably produced goods, signalling a demand for more affordable eco-conscious choices.
Uncertainty remains around AI
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. 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.
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
Read more in Retail & Manufacturing
Media queries
If you’re a media professional and have any questions about this article or would like to speak to one of our experts for background or interview purposes, please don't hesitate to reach out to us. Contact Sandra Farrell of our Communications team for more information.
Sandra Farrell
Associate Director of Communications
KPMG in Ireland