Irish consumers are concerned about the cost of living and rising costs as they go about their Christmas shopping. Many people are planning to spend less across various categories, compounding saving intentions from the last few years, the latest Dentsu Pulse report shows. For clothes brands, going out/entertainment, and beauty and wellness brands this represents a challenge to either appear value for money or become important Christmas gifts.
Overall, Irish people plan to buy most gifts either online or shop both online and in store.
However, the study does not detect a big decrease in intentions to purchase in-store compared to last Christmas showing bricks and mortar remaining steady, with high proportions of adults planning to buy local and Irish. Two thirds of adults remain concerned about the high cost of living, with females and those aged 45 to 54 expressing the most concern. It represents a decrease from 74 per cent in 2022, when electricity prices were particularly high.
Most adults are trying to remain on budget for Christmas and are paying for items with debit cards or cash. However, one in five (21 per cent) will use credit cards to pay for gifts, three per cent will use a personal loan and eight per cent resort to buy-now-pay-later, with responses similar to 2023. Those aged 55 and over are more likely to use a credit card (29 per cent), while those aged 25-34 (14 per cent) and 35-44 (14 per cent) will defer their payments.
ADVERTISEMENT
For the last two years, adults are trying to spend less across numerous categories for Christmas. This year is no different, with few saying they will be spending more or returning to the level of spending seen in pre-Covid times. The report says that over half of adults plan on spending less on clothes (52 per cent), going out/entertainment (50 per cent), and beauty and wellness (43 per cent) – categories where people were also trying to save last year.
Brands in such categories need to remain salient and show proof of their value, particularly as gifts. Many people are likely to buy fewer gifts (41 per cent) and spend less on gifts (39 per cent), which is similar to last year. Clothing and footwear and cosmetics/beauty/perfume are the most popular categories for gifts, just as they were in 2023. One in five intend to buy sports clothing and equipment with a similar proportion intending to buy new tech.
Implications
Dael Wood (pictured), strategic consulting director, Dentsu, said spending on gifts and for Christmas generally this year is likely to be intentional in the context of ongoing cost of living concerns. Being salient, relevant and appealing as gifts is one way for brands to circumvent consumers financial frugality this Christmas. A total of 1,000 Irish adults were interviewed about their spending intentions this Christmas for the report.
