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Consumers limit restaurant dining and clothing purchases as inflation surges

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Consumers are cutting back on eating out and buying clothes as inflation soars, a new survey shows.

The tightening of purses comes just as the High Street hopes for a meaningful post-Covid recovery.

The survey of more than 1,000 people by the accounting firm KPMG found that 84 percent of consumers are eating out less and 78 percent are spending less money on clothing. The survey found that 74 percent of consumers are also cutting their DIY budgets.

And worryingly for Irish businesses, 40 per cent of consumers here rank buying in Ireland as the least important factor in their purchasing decisions. That’s because 64 percent of consumers say getting the best price is their top priority.

Rising inflation is hitting people’s wages, and the cost of everything from fuel to food is rising.

Although the government has temporarily reduced excise duties on petrol and diesel, the price at the pump has risen again to over €2 per liter.

Without the excise tax reduction of 20 cents per liter of petrol, the price of petrol would now be closer to €2.50 per liter. The reduction in consumption tax should only last until the end of August.

According to the KPMG survey, more than half of consumers over the age of 45 buy fuel more frequently.

Eurostat estimates that inflation in Ireland reached 8.2 percent in May, compared with 7.3 percent in April.

Russia’s invasion of Ukraine has pushed up prices for fuel and staples like bread, pasta and cooking oil.

“Inflation is changing consumer behavior and purchasing patterns, and we expect an increasing emphasis in some sectors on price promotion and marketing of special offers when consumers search for deals,” said Keith Watt, head of retail at KPMG.

“The findings will provide food for thought for leaders across many sectors, including hospitality and leisure, who are already facing their own challenges of staff availability and rising input costs,” he added.

The lifting of Covid-related restrictions has also meant that consumers have reduced their reliance on online shopping.

However, the survey found that despite a significant shift towards physical shopping, 46 per cent of people are still avoiding large malls and city centers due to Covid fears.

However, that’s less than the 61 percent who avoided such places in December.

https://www.independent.ie/business/personal-finance/consumers-cut-back-on-dining-out-and-buying-clothes-as-inflation-surges-41723555.html Consumers limit restaurant dining and clothing purchases as inflation surges

Fry Electronics Team

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