“Scrooge-like Christmas on the way” as pressure on the cost of living bites

THE cost-of-living crisis means Christmas will be ‘Scrooge-like’ for many people.

Tighter household budgets are leading people to save across the board, with spending on the festive season being one of the casualties, according to a special set of questions asked as part of the Credit Union’s consumer sentiment survey.

Three out of four consumers told researchers they cut down on essentials, like eating and heating.

A minority of just 7 percent said they don’t make cuts because they have sufficient funds.

Going out is one of the spending items that is about to be hacked.

Economist Austin Hughes, who is coordinating the survey, said it would deal a double blow to the hospitality industry as it already grapples with high energy bills.

He said the survey responses showed that cutbacks are now a key feature of Irish consumer behavior and this will continue at a brisk pace in the coming year.

“About one in three people limit gift giving, so Christmas could be like a Scrooge,” Mr Hughes said.

However, there is little evidence that children will lose presents this Christmas, with just one in 12 people planning to reduce spending on children.

Areas where spending is being cut are energy and food.

According to the survey commissioned by the credit unions, consumers plan next year to make cuts broadly similar to this year’s.

All age groups reported saving, but slightly fewer among those aged 55 and over and those classified as wealthy.

These groups were also slightly more likely to say they only cut discretionary spending.

Mr Hughes said: “It’s not too surprising that the cut most frequently cited relates to socializing. In essence, this is a flexible spending area.”

However, he added that the fact that up to half of consumers are retiring from going out will not improve people’s mood and will further weigh on the viability of many cafes, bars, restaurants and other domestically-facing parts of the hospitality sector.

And with two in five consumers also saying they are cutting back on holiday spending, troubles for many companies in this sector of the economy look set to remain major in 2023.

According to the survey, which was formerly sponsored by KBC Bank Ireland but is now funded by the credit unions, around two in five consumers say they plan to reduce their energy spending.

This implies many homes will be colder and darker than normal this winter, Mr Hughes said.

“Less affluent consumers and consumers outside of Dublin were more likely to report energy-related cuts.

“Surprisingly, those over 65 were also slightly less likely to report cuts in this area.”

He said this could be due to government support or existing spending restrictions on older households in the area.

The survey found that a third of consumers are cutting back on their grocery spending.

But 6pc say they cannot make cuts in this area as they have already reduced their spending on groceries and other basic necessities to a minimum.

Many people postpone large ticket purchases such as cars, furniture or electrical appliances.

https://www.independent.ie/business/personal-finance/scrooge-like-christmas-on-the-way-as-cost-of-living-pressures-bite-42081816.html “Scrooge-like Christmas on the way” as pressure on the cost of living bites

Fry Electronics Team

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