February 2022 - Consumer Mindset

Rebound or Re-Adjust?

The Irish economy will see a strong rise in consumer spending of about 8-9% in 2022. Retail sales (ex motor sales) were about 5% higher in the final quarter of 2021, compared to a year earlier. This was in line with the average increase in the three years prior to the pandemic. Those who have been declaring a post-Covid boom may need to acknowledge that while there is a healthy economic rebound, consumers are not pushing for a boom, and this reflects the consumer mindset that has adjusted over the past two years.

“I’ll believe it when I see it.”

As well as the appalling murder of Ashling Murphy, the lifting of COVID-19 restrictions was the top news story which Irish people engaged with over the past 4 weeks. Of the 94% of citizens who were aware of the announcement, 54% said they felt happy when they heard the news. A further 19% were surprised and 8% afraid. While this shows that half of the population are joyful about this moment in the pandemic, the other half may be more guarded about their future expectations.

As a friend said to me about the news, ”I’ll believe it, when I see it” summarising many peoples’ views that we have called the end of the pandemic before, and we will give it some time before fully embracing this new world.

Hopes are High: 64% are optimistic

While there may be a healthy level of vigilance, public optimism about over-coming COVID-19 has risen again to new highs – 64% of people ‘very’ or ‘somewhat optimistic’.

While we had bursts of this optimism in both May and October 2021, the average percent across last year was 54%.

From Covid to Cost of Living.

The positive news about the pandemic has undoubtably provided a rise in the nation’s mood, but consumer confidence will remain flat. As discussion moves from managing the COVID-19 crisis to other areas particularly housing, rent, energy prices and the general cost of living, consumers are re-adjusting again to planning their lives with rising costs in mind.

58% of people say they find it difficult to pay their bills every month. With most of the population feeling the squeeze of rising energy and fuel prices as well as continued rises of rental costs, confidence of consumers will be measured, and many will make significant changes to their lives in 2022 – from seeking a pay rise, to changing jobs, from moving outside of cities to working less in the office. If costs (as many expect) continue to rise, consumers will be smart and re-adjust much of their decision making (including brand choices) to protect themselves.

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