Consumers remain tentative about spending, PwC survey finds

Consumer sentiment remains fragile, according to PwC, with more than half of Irish consumers expecting little change in their level of spending over the next six months compared with the previous six months.

The accountancy giant’s consumer insight pulse survey, which questioned 9,370 across 29 territories – including more than 500 in the Republic – found 60 per cent of Irish consumers expect to spend the same on Christmas presents in 2021 as they did last year.

Some 60 per cent of Irish consumers have increased their focus on savings and prices in the past six months, PwC said, with getting the best deal the top priority for both online and in-store shoppers ahead of efficient delivery/collection and buying locally.

In-store shopping has recovered, it added, with almost half of Irish consumers – 45 per cent – visiting a physical store at least once a week, bringing in-store consumption back to 2018 levels.

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Globally, some 48 per cent of consumers have returned to physical shopping, while in the United States, where store closures have not been as extensive throughout the pandemic, some 55 per cent of consumers visited a physical store at least once a week.

However, the pandemic has also left a legacy of online consumption, PwC said, with 47 per cent of Irish consumers saying they have become more digital in their approach to shopping over the past six months.

A third (32 per cent) engage in e-commerce on their smartphones at least once a week, up from 19 per cent in 2019 and just 9 per cent in 2017. Irish consumers still have “some way to go to catch up” with global rates of online purchasing, with 41 per cent of consumers in PwC’s overall study saying they made purchases using their phones at least once a week.

Fashion is the most common prompter for online shopping, while groceries are the leading reason for in-store visits.

Closing gap

The generation gap for shopping via mobile is closing, PwC said. More than one-fifth of people aged 55-64 now shop at least weekly using their phones, a six-fold increase on 2017 levels. However, younger age groups are still more likely to do so, with 44 per cent of 18-24 year olds shopping at least once weekly using their mobiles.

At the time of the survey, some 34 per cent of Irish survey respondents are splitting their work weeks between home and the workplace, a phenomenon known as hybrid working, while 16 per cent are working from home all the time.

This compares with 42 per cent of global respondents who are engaged in hybrid working and 13 per cent who are working from home full-time.

The “most optimistic” consumers are those who are hybrid working, PwC said.

"The events of the last two years have changed how we live, work and shop. The evolving Irish consumer is responding to the current macroeconomic challenges with an increasing focus on savings, price sensitivity, purchasing online via multiple channels, customer service expectations and sustainability expectations," said John Dillon, leader at PwC Ireland's retail and consumer practice.

“However, faced with cost of living increases and threatened by rising Covid-19 levels, it is not surprising that more than half of Irish consumers plan no change in spending levels in the next six months.”