One in two Irish adults felt that they had more spare cash coming out of lockdown due to reduced expenses, absence of any form of out of home entertainment, including travel and an inability to spend given that non-essential shops and services were closed, the latest wave of B&A’s Shaping Ireland’s Future consumer spending and priorities shows.
For the study, B&A looked at consumer spending and priorities at two important points in time: coming out of the initial lockdown back in June and looking forward over the next year. While cash savings were broadly felt, it was more apparent for men, younger adults aged 18-34 and those working full time but even higher among those working from home.
However, it is important to note that a considerable proportion of those who were unemployed, one in three, felt that they had some more spare cash than usual, with 12 per cent reporting they had less spare cash than usual. The research also explored in more detail a broad range of specific areas where savings might have been made during lockdown.
It highlights the industries that have been most impacted by the Covid-19 pandemic.
Unsurprisingly, areas where people made the most savings were from eating out (60 per cent), holidays abroad (54 per cent) and motoring or commuting (42 per cent) and fashion (37 per cent). Around one in three people made savings on small purchases such as grab and go items like coffee and breakfasts bought from convenience stores.
The research by Kate Corneille (above) also gives an insight into Irish consumer mindsets.
When asked about their future discretionary spending, there is something of a hiccup along the income expectation journey. Here, most workers are projecting a fall in income over the next year such as a pay cut or job loss (70 per cent) while almost half (47 per cent) of all workers expect their taxes to increase over the next 12 months.
Increased costs
In addition, there is an expected increase in costs (67 per cent) such as winter heating and commuting costs which will ultimately negatively impact their discretionary spending in the coming year. It shows a certain cautiousness about spending even if restrictions were lifted. While a Christmas spending bonanza is still expected, some of this extra cash built up over both lockdowns may be retained for possible financial hardship next year.
B&A also undertook an advanced research technique called a maximum difference analysis on consumer priorities as they look forward to the next half year. The analysis helps pinpoint consumer priorities by trading off different options against one another. It is a more accurate way of exploring priorities compared to asking respondents simply to rank them.
An interesting finding from this analysis was that Christmas gifts for children (34 per cent) and a holiday (21 per cent) were the top two consumer priorities – although taking a holiday right now is unlikely given current restrictions. For those with children, their share of preference for Christmas gifts rises to 47 per cent compared to nine per cent for non-parents.
Priorities
Another noteworthy finding from this analysis was that there were some significant differences by demographics. One in three of consumer priority spending for over 65s was a holiday compared with just 18 per cent of share for those under 50. Homeware and home improvements were also twice as likely to be viewed as a priority for those over 65.
Lastly, this research found that younger people aged 18-34 give greater priority to media subscriptions such as Netflix and Amazon Prime (a 3:2 ratio compared with the national average) and are more likely to prioritise eating out and going to pubs compared to the national average. Online classes are also on the list of priorities for a niche younger audience.
In conclusion, the situation with Covid-19 remains fluid as we learn to live with the virus until a vaccine is available. It will be interesting to undertake this research again in six months’ time to see how consumer priorities shift in this dynamic market. The B&A research is based on a quota controlled sample of 504 adults aged 18 and over.
Author: Kate Corneille, research executive at Behaviour & Attitudes – B&A. She holds a BA (joint honours) in psychology and French and a first-class honours MA in psychology from the University of Limerick where she was awarded with best QCA at MA level and outstanding performance in major research project; kate@banda.ie.
