Consumers to cut spending on luxury items - survey

IRISH CONSUMERS are starting to feel financially squeezed and many are preparing to cut back on their spending, according to a new survey.

The Mintel Ireland Irish Lifestyles 2008 survey found that 67 per cent of people are now more conscious of their finances than they used to be.

The survey of 1,000 consumers in the Republic and 1,000 in the North shows that rising costs of living are having a direct impact on everyday lifestyles, with many feeling the impact of higher utility bills and a tightening of credit conditions.Mintel analysts said the survey reflected a "batten down the hatches" approach being taken by many Irish consumers.

"Rising costs of living are forcing Irish consumers to think about ways in which they will change their lifestyles in order to cope with financial pressure," said Julie Sloan, head of research for Mintel. "It is expected that consumers will have to ease back on non-essential purchases, especially with regard to luxury items. These are the sort of sacrifices in consumer spending that will take place in the next 12 months."

However, there is also a general reluctance to seek financial advice, with many Irish consumers believing that they are best positioned to manage their financial affairs.Taking tighter control of household bills and eating out less often were the two most likely ways in which consumers in the Republic plan on cutting back. More than six in every 10 consumers said they were planning to eat out less often, with 64 per cent saying they would take tighter control of household bills.

"Restaurants, pubs and clubs are likely to suffer as Irish consumers' knee-jerk reaction is to stay in and save money," said Mintel.

About 42 per cent of consumers are prepared to cut back on grocery bills and other household items, while 60 per cent said they would buy fewer new clothes, shoes or jewellery. Some 55 per cent would cancel DIY and home improvements.

However, the majority said they would still find time to go on a big summer holiday and short breaks.

"Irish consumers are focusing on things that matter most to them, such as taking a well-deserved holiday, spending time with family and achieving a better work/life balance," said Ms Sloan.