COST OF LIVING increases are now the dominant issue among consumers with 81% of respondents saying they are a key concern, according to new research.
New research from the permanent TSB has found that the level of concern about price increases has risen from 62% just three months ago to 53% in October 2021.
The same research found that 62% of people feel they will have to cut food spending over the next year in response to sharp price increases, while 53% of people fear they won’t be able to afford higher energy bills. .
The findings are part of the latest research series from the permanent TSB called Reflecting Ireland.
The series surveys public attitudes every quarter and includes recurring questions about how people view their personal financial situation and their views on the outlook for the economy and the country, as well as a more detailed survey on different topics.
The research was conducted by Kantar in April 2022 among a representative sample of 1,002 people over the age of 18.
Leontia Fannin, Head of Corporate Affairs at the Permanent TSB, said the surge in optimism as Covid-19 began to dissipate has been lost due to rising prices.
“The feel-good factor that emerged as Covid-19 began to recede has clearly been halted by the recent increase in the cost of living and economic uncertainty stemming from the devastating events in Ukraine.
“The cost of living issue is likely to dominate Irish consumers’ thoughts for the rest of this year and beyond, and is likely to have significant implications for business in general,” he said.
Consumer pessimism is at its highest level in nine years: 43% believe they will be worse off a year from now, up from 22% in January.
53% of respondents feel they are less well off than a year ago, a big increase from 32% in January. 43% feel they will be less well a year from now, compared to 22% when asked three months ago.
The last time pessimism about the future was this high was in 2013 when it reached 45%. Only 24% of people feel they will be better off a year from now.
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62% of people feel they will have to cut food spending over the next year in response to sharp price increases, while 53% of people worry they won’t be able to afford higher energy bills.
There is also great concern about making ends meet. 61% describe themselves as “just getting by” financially. 58% feel confident managing day-to-day expenses, while 22% do not. 43% of respondents don’t have money left over at the end of the month, and 47% don’t feel they can handle a major unexpected expense.
Paul Moran, associate director of Kantar, said many consumers have been surprised by the price increase.
“The unprecedented acceleration in inflation has somewhat surprised many consumers. We are now seeing a generation of consumers who have never experienced such a phenomenon.
“It’s not just about the short-term fiscal implications: there’s a more ingrained emotional response; fear of the unknown for many. They feel like they’re in uncharted territory, but now they have to chart a journey forward,” he said.