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Irish Times
02-05-2025
- Business
- Irish Times
Consumers moving to own-brand products amid cost pressure, EY study shows
The vast majority of Irish consumers remain concerned about the cost of living crisis with higher prices driving them towards own-brand products in greater numbers, according to new research from EY. How Irish consumers shop has been reshaped with price now firmly the main consideration, according to the EY's Future Consumer Index, which surveyed more than 20,000 consumers across 26 countries, including more than 500 in Ireland. With global economic uncertainty set to persist and price levels not expected to return to pre-pandemic levels these behavioural shifts are unlikely to be temporary, but instead signal a lasting reset in consumer priorities, the research suggests. Positively for Irish retailers in-store shopping for everyday items remains resilient, while health and sustainability are high priorities for consumers and of increasing importance for businesses seeking to entice consumers and differentiate their product offering. READ MORE Financial concerns continue to dominate the Irish consumer mindset, with 96 per cent concerned with the cost of living and 92 per cent with their own personal finances. Unsurprisingly, price has emerged as the primary driver of consumer purchasing in Ireland and has prompted a shift in shopping habits to find better value. Almost half of Irish shoppers rely on discount shops to make their budgets go further while a similar number plan to hold out for sales or join loyalty programmes to secure better value. Budget sensitivity has shifted the perception of 'own brand' products which were once seen as the second choice on the shelves. All told 78 per cent of Irish consumers are more likely to say that private label goods meet their needs just as well as branded products compared with 67 per cent globally. The sentiment varies by category and while private labels are making strides in fresh food, confectionery and processed cupboard staples, branded goods continue to dominate in beauty and alcohol – categories where image, experience and indulgence remain important. Cost-conscious consumers have become more wary of 'shrinkflation', where products are reduced in size but prices stay the same, and sceptical of overly generous promotions with 48 per cent saying new product improvements are often the result of cost-cutting rather than genuine enhancements for the customer. Amid the anxiety, however, there is some optimism with 54 per cent of consumers believing they'll be better off in 12 months, compared to just 19 per cent who think they'll be worse off. 'Consumer behaviour has traditionally shifted during economic uncertainty and periods of acute price inflation, but today's changes appear to be more fundamental,' said EY's Colette Devey. 'Unlike past cycles – where consumers returned to familiar brands post-crisis – prolonged inflation, supply chain disruptions and geopolitical instability would seem to be reshaping habits permanently. '
Irish Independent
02-05-2025
- Business
- Irish Independent
Families turn to own brands and discount stores to make grocery budget go further
New research shows shoppers are also fighting high prices by avoiding online shopping. More than half of Irish consumers said price was a significant factor when it came to deciding what to put in their shopping trolleys, according to the latest Future Consumer Index from consultants EY. Close to half of the respondents to the survey said they were using discount shops to make budgets go further. Official figures out this week show food prices are continuing to rise. They are estimated to have increased by 0.6pc in the last month, and by 3.1pc in the last 12 months, according to the Central Statistics Office (CSO). Grocery prices have been rising for more than two years, and experts estimate they have increased by around 25pc over the last several years. A typical household now spends an estimated €2,000 more a year on groceries than it did in 2021. EY found that consumers are responding to rising prices by opting for own-brand products sold by supermarket chains, which tend to be far cheaper. Nearly eight in 10 respondents said own-brand products are just as good as the more expensive big-name ones. The EY Future Consumer Index involved a survey of more than 20,000 consumers across 26 countries, including more than 500 people in Ireland. ADVERTISEMENT Seven in 10 respondents here said they preferred physical stores when buying everyday items, underscoring the importance of bricks-and-mortar shops. Nearly three-quarters said they want healthier and more sustainable products to be more affordable. EY said that with global economic uncertainty set to persist and price levels not expected to return to pre-pandemic levels, these behavioural shifts are unlikely to be temporary. Instead, they signal a lasting reset in consumer priorities, and Irish businesses must act to respond to these changes, the consultancy group said. More than half of consumers believe they will be better off in 12 months' time, while 19pc think they will be worse off The research found financial concerns continue to dominate the Irish consumer mindset. Ninety-six per cent of respondents are worried about the cost of living, but despite the anxiety, there is some optimism. More than half of consumers believe they will be better off in 12 months' time, while 19pc think they will be worse off. EY Ireland consumer sector lead Colette Devey said consumer behaviour has traditionally shifted during periods of economic uncertainty and acute price inflation 'But today's changes appear to be more fundamental,' she added. 'Unlike past cycles, where consumers returned to familiar brands post-crisis, prolonged inflation, supply chain disruptions and geopolitical instability would seem to be reshaping habits permanently.'
Yahoo
28-03-2025
- Business
- Yahoo
As inflation looms, brands have to work harder for loyalty
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Amid economic pressures and tariff uncertainty, consumers are reassessing their shopping choices and showing less loyalty to brands, according to the EY Future Consumer Index released Wednesday. EY surveyed 20,000 consumers across 26 countries. Price sensitivity was the No. 1 purchase consideration for 4 in 5 consumers globally. More than half of consumers are very concerned about rising living costs. 'The survey findings tell us it's simply not enough to be just good enough,' said Rob Holston, EY Global and Americas consumer products sector leader, 'Brand loyalty is in the balance and consumers aren't just buying names anymore — they're buying value, quality, purpose and performance. Consumers are concerned about the economy, and as prices rise, they want more from brands to earn their loyalty. Anxiety about the economy is widespread. In addition to the EY survey, the Conference Board found that consumer expectations hit a 12-year low in March as expectations for employment, personal income and business environment over the next six months dropped. More than three-quarters of consumers are changing their purchase behavior in response to price increases, the EY survey found. In many cases, consumers are moving away from brand names. About one-third of consumers say they no longer consider brands when making purchase decisions. About two-thirds say private label items are just as good as branded products, and just over half only buy branded products when they are on sale. On an earnings call Wednesday, Dollar Tree said the inflationary environment had led to increased traffic at the discounter's stores. 'What's been most interesting is this time around, this inflationary environment, all shoppers across all income cohorts, including the higher income, is finding Dollar Tree as part of their solution,' Dollar Tree CEO Michael Creedon said. 'We believe it doesn't matter how much money you make, everybody is hurting right now.' Though consumers are widely prioritizing prices over brand loyalty, all is not lost for loyalty: Two-thirds of respondents say they still value brands. But consumers have higher expectations for value, trust and relevance. Among customers who have left a brand for another, about half say they would return to a premium branded product if it offers better quality or performance, and one-third say they would return for better value. As prices rise, consumers want more value for what they're paying. Customer experience can be a differentiator, Mario Matulich, president of Customer Management Practice, told CX Dive earlier this month. 'Those that are prioritizing CX as a primary offering, as a major piece and a foundational piece of their value proposition, those organizations are a position to gain market share in the in the next interim period where [inflation] may be the case, where prices are going up,' Matulich said.
