From inflation to bank exits, 2022 was an annus horribilis for consumers

This year wasn’t supposed to go the way it did. While the cloud of Covid was still hanging over pretty much everything last Christmas – not least because of the sudden arrival of a particularly virulent, vaccine-dodging new strain of the virus as the festive season approached – much of the talk as 2022 dawned was of the post-pandemic party the nation would have.

Many people had money set aside and the world was reopening after almost two years of lockdowns and restrictions. The economy was in pretty decent shape and consumer sentiment was getting stronger. Energy prices had climbed and inflation was heading upwards but – or so we were reassured – everything was going to be okay. Here’s a survey of key happenings in 2022, month by month.

January

Irish consumer sentiment climbs as concerns about the severity and duration of the pandemic ease, at least according to the KBC Bank Ireland consumer sentiment index. “Our sense is that the turnaround was helped notably by very encouraging end-year exchequer returns and unemployment data released early in January that highlighted the exceptional resilience of economic activity and the jobs market,” economist Austin Hughes said.

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It emerges that we are increasingly relaxed as to how our data is being used with the number of consumers in Ireland concerned over the use of their data falling over the three preceding years, despite indications that consumers are becoming increasingly aware of how online companies use their data. Deloitte Ireland’s latest Digital Consumer Trends report suggests concern among consumers in Ireland has more than halved to 25 per cent this year, from 54 per cent in 2018.

A report from the Central Bank suggests that total debit and credit card spending, including ATM withdrawals, hit a record €8.4 billion in December 2021, as consumers spent more in shops and online in the lead-up to Christmas. It was the highest spend recorded in this series, which began in January 2015 and was an 8 per cent increase on the December 2020 period.

Inflation data from the Central Statistics Office suggests that consumer prices rose by 5.5 per cent in the year to December – the largest change seen in 20 years. Higher transport and energy costs as well as increased rents and mortgage interest repayments were blamed.

Hundreds of thousands of consumers could be paying over the odds for reduced levels of health insurance cover because they are afraid to shop around, according to the chief executive of the Health Insurance Authority (HIA), Laura Brien. “People are worried more about what they might lose rather than thinking about what they might gain,” she says. Annual savings amounting to hundreds of euro are available to many who switch health insurance policies, but more than one million have never looked for better value.

The Republic recorded the largest jump out of 40 countries in customs charges attached to online shopping in 2021, according to a new survey. We have Brexit and the popularity of British online retailers here to thank for that.

Ireland’s consumer and competition watchdog is to be given a range of new powers to punish businesses which engage in anti-competitive behaviour under a “groundbreaking law”. The Competition (Amendment) Bill 2022 will give more muscle to the Competition and Consumer Protection Commission (CCPC) and the Commission for Communications Regulation (ComReg) to challenge anti-competitive practices by business.

Antigen tests made by Genrui Biotech are withdrawn after concerns over their accuracy. Warning bells sounded when users started noticing they were testing positive with the kit and then negative with the PCR test required to confirm the initial result. Other people said they were testing positive with the Genrui kit but negative with other antigen test brands. The Health Products Regulatory Authority asked retailers to take the product off their shelves after receiving more than 550 reports of false positives.

Consumer concerns about health and the environment are spurring the rise of vegan dogs who are being fed plant-based dog food and pet treats. Whether or not the dogs are happy with the trend remains a mystery.

We are assured that the current high rate of inflation should ease later this year by Central Bank governor Gabriel Makhlouf who, to be fair, does not own a crystal ball of any sort. He said an elevated level of price growth would decline as 2022 progressed “as supply chain issues unwind and energy prices stabilise”.

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February

At the start of the month, The Irish Times carries an article suggesting Irish people will be worse off by about €2,000 over the course of 2022, once the higher costs of energy, fuel, food and more are totted up. By the autumn, the article – which seems gloomy when it appears – seems like wishful thinking.

After two nightmare years for the travel sector, Irish people rediscover their appetite for overseas visits, with spending on flights taking off by up to 256 per cent.

The Irish economy is expected to grow by 5.5 per cent this year, with inflation rising by 4.6 per cent, well above the euro zone average, the European Commission tells us. It predicts that euro zone inflation will fall to 1.7 per cent in 2023.

Then that massive moment: Russia invades Ukraine. Putin’s war makes all previous predictions seem ridiculous. Oil, gas and many other commodity prices go through the roof, plunging the world into a state of economic uncertainty that would have been unimaginable as the year began. It also sparks the greatest humanitarian crisis in Europe since the end of the second World War and over the months that follow will see many thousands of innocent men, women and children killed.

March

With energy prices soaring, the Government announces that Irish households are to receive €200 off their domestic electricity bills in April. It also signs off on a cut in excise duty in an attempt to counteract sharp rises in the price of fuel.

Bord Gáis Energy announces its gas and electricity bills are to climb by 39 and 27 per cent respectively. It blames high global wholesale energy costs and market volatility. The increases mean the average domestic gas bill climbs by about €350 and the average electricity bill by €340 annually. All other companies follow suit and then increase prices again over the course of the year, effectively doubling the cost of domestic energy in little more than a year.

Almost 50 per cent of Irish consumers say they are buying less from British websites in the wake of Brexit, with 16 per cent having stopped shopping on sites operating from the UK completely. The findings are contained in a piece of research carried out on behalf of the CCPC. More than 40 per cent of those who took part said they experienced problems when making purchases. Unexpected customs charges and delayed delivery were the most common issues experienced by consumers.

April

Just 10 per cent of the 750,000 homes with smart meters are using them to access smart electricity services, including monitoring of efficient consumption. Many people with smart meters are actually paying more than those with less-than-smart meters – which is anything but smart.

According to Deloitte’s State of the Consumer tracker, the number of people in Ireland delaying large purchases increased by 5 per cent to 52 per cent. The survey also indicated that those concerned about the rising cost of everyday prices jumped another 4 per cent to 86 per cent.

May

Most Irish consumers believe the culture of banks has not improved since the financial crisis, according to a new survey carried out for the Department of Finance. Almost a third of those who took part were of the view that the culture of Irish banks had got worse since 2007 and 2008, when the credit bubble burst and taxpayers were forced to guarantee the financial system.

The number of consumers citing the cost of living as a “key concern” has increased by a third in just three months, while significant numbers have concerns around paying for food and electricity, Permanent TSB says. All told, 81 per cent of consumers cite increases in the cost of living as a key concern, up from 62 per cent just three months ago and 53 per cent the previous October, making it the “dominant issue” for people.

Hotel prices start going through the roof. In the middle of May there were just 42 rooms available in the centre of Dublin for three nights over the June Bank Holiday weekend on the popular hotel reservation platform booking.com, reports this newspaper. Only one of the 42 rooms on offer was coming in at less than €150 a night.

June

Millions of European consumers have been unwittingly “placed on a fast track to surveillance” after signing up to Google services because of how the tech giant sets up its platforms, according to an EU-wide consumer group.

The European Consumer Organisation (BEUC), which has a presence in 10 EU countries, has accused Google of “unfairly steering consumers towards its surveillance system” when they sign up to its services, instead of giving default privacy options.

“It takes one simple step to let Google monitor and exploit everything you do,” said the BEUC deputy director general, Ursula Pachl. “If you want to benefit from privacy-friendly settings, you must navigate through a longer process and a mix of unclear and misleading options.”

Irish consumers are spending more on groceries, restaurants and fuel while cutting back on leisure activities and clothes shopping as the cost-of-living squeeze intensifies

Irish consumers pay 40 per cent more for energy than the EU average, with costs here the second highest in Europe, but that is only the starting point when it comes to higher prices, according to bonkers.ie.

The much higher costs faced by Irish consumers do not stop at energy, with Ireland also appearing at the wrong end of the pricing table when it comes to hotels and restaurants, food and drink, healthcare, mortgages and communications.

Irish consumers recycled a record number of electrical items last year, making WEEE Ireland one of the best performing recycling schemes in Europe, with a record 18.7 million waste electrical items collected in 2021. About 127,000 fridges and 205,000 TVs and monitors were recovered, as well as more than 2.3 million light bulbs, for a total take-back of 38,464 tonnes.

Consumers have a responsibility to put an end to “destructive retail practices” which see supermarket chains selling food at below the cost of production, President Michael D Higgins says.

Speaking at the Bloom festival in Dublin’s Phoenix Park, Mr Higgins said people “should be willing to walk past these artificially priced products and support the people who are producing our food in the most sustainable conditions”, adding that using food as a loss leader is “totally contradictory” when the emphasis should be on sustainability.

July

The majority of Ulster Bank and KBC Bank Ireland customers who have yet to open current accounts elsewhere risk payment disruptions and negative credit ratings if they do not move soon to find alternative homes for their banking, the Irish consumer protection watchdog warns.

A survey from the CCPC finds that 81 per cent of current account customers of the two banks as of the end of last year plan to find a new account provider. However, only 44 per cent of these had opened new accounts.

A PwC survey finds that 32 per cent Irish consumers expect to cut back spending on products and services over the next six months as day-to-day living costs soar amid rising inflation globally.

Research from Accenture finds that 75 per cent of consumers think it is hard to live sustainably, despite taking measures such as buying less and cutting down on single-use plastic.

August

August brings a small but continuing drop in consumer confidence in the Republic as households brace themselves for further price pressures, according to KBC Bank Ireland. The lender’s latest consumer sentiment index shows consumer confidence here falling for six out of the last seven months.

Irish consumers are spending more on groceries, restaurants and fuel while cutting back on leisure activities and clothes shopping as the cost-of-living squeeze intensifies, according to fintech Revolut.

After a record year in 2020 which saw more than 10 million cases sold, wine sales in the State slumped in 2021 due to a combination of forces, including the reopening of the hospitality sector and a decline in alcohol consumption generally, according to Wine Market Report from industry group Drinks Ireland. Wine sales fell by 13 per cent to 8.7 million cases, corresponding to the lowest level of sales since 2015.

September

Continuing price rises are making energy bills “unaffordable” for many people and measures to ease the pressure on consumers will be implemented quickly after the budget, the Government pledges.

Many consumers are at risk of not being fully covered for their losses if they have to make a home insurance claim, the Central Bank warns. It says under-insurance increased from 6.5 per cent in 2017 to 16.5 per cent in 2021.

European consumer advocates are calling on the European Commission to beef up civil liability rules for products and services, claiming they are too weak to deal with services driven by artificial intelligence.

A cost-of-living budget is rolled out by the Government, with a multi-billion euro package aimed at alleviating some of the worst impacts of the spiralling prices of almost everything. Energy credits play a starring role and will amount to €600 between November and the spring. The Government also introduces broad-based measures to help businesses with their energy bills.

October

Irish consumer prices, harmonised to compare with other EU member states, rose by 9.5 per cent on an annual basis in October, according to the Central Statistics Office. The main driver was energy prices. They are estimated to have increased by 13.6 per cent in October and by 47.6 per cent compared to a year ago. When energy prices are excluded, inflation was 5.9 per cent higher on an annual basis.

Almost half of advertising by social media influencers is untagged as such or is poorly tagged, while consumers overestimate their ability to recognise such ads

Discounts that have been available for years for people who regularly change energy provider are slashed as companies seek to offset the impact of rising wholesale prices by targeting switching consumers, in addition to raising their standard unit rates.

While there are still some incentives on offer to those who switch providers, the potential savings have been reduced from the 25 to 40 per cent range that was commonly available earlier this year to little more than 10 per cent in most cases.

November

Heineken writes to pubs around the country saying it is planning to roll out a price hike that could add 25-50 cent to the price of a pint, which would see the average price of a pint of its lager climbing above €6. People do not take the news well and, days later, the brewer is forced into a partial climbdown and announces it will delay much of the price hike until 2023.

Presents that are functional rather than fun might find their way under Christmas trees across Ireland next month as the cost-of-living crisis deepens and forces people to reassess the gifts they buy and the prices they pay for them, an EY study suggests.

Consumers will receive up to 25 cent per can or bottle they return under a new Deposit Return Scheme. The deposit for returning plastic bottles and aluminium cans of less than 500ml will be 15 cent, while those over 500ml will be 25 cent.

A new Bill of rights which should improve the life of Irish consumers for years to come is signed into law. The Consumer Rights Act will give people more rights that are stronger when it comes to goods and services that do not work as they are supposed to. The law will also empower regulators to address issues with providers in a more forceful manner than has often been the case up to now.

December

Tens of thousands of potentially dangerous phone-charging plugs have been recalled by the State’s consumer authority over fears that users may suffer electric shocks when plugging them in or out.

Almost half of advertising by social media influencers is untagged as such or is poorly tagged, while consumers overestimate their ability to recognise such ads, research by the CCPC has found.

As many as 192,000 “primary” current accounts in departing banks KBC and Ulster Bank remain open, the Central Bank says, despite a 50 per cent fall in the number of such accounts at the two banks since July.

Ulster Bank started to freeze inactive or low-use current and deposit accounts in early November and KBC began to close similar types of accounts in December after the initial wave of customers to be given six months’ notice to find alternative homes for their banking activities passed the deadline.

Property prices rose by 9.8 per cent in the year to the end of October, new data from the Central Statistics Office shows. It is the first time the growth rate has been in single figures in 14 months. The median price of a house in the State is now €300,000, with the most expensive residential property in Dún Laoghaire-Rathdown at a median price of €620,000, while Longford recorded the lowest median price at €148,000.