Next Gen Retail survey

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

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."

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.

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.