Consumers will be making careful decisions on how and where they spend their money in the coming weeks, with the cost of living and environmental concerns at the forefront of their minds, according to a global survey.
The EY Future Consumer Index shows more than half of consumers (52%) plan to spend less on non-essential goods this Christmas.
The study finds that businesses will have to meet the needs of the conscious consumer on both affordability and sustainability.
Overall, consumers are optimistic about the future, and 74% are looking forward to getting "back to normal," after so much disruption caused by the Covid-19 pandemic.
While 58% of respondents feel very concerned about the rising cost of living, 59% feel in control of their lives and are eager to catch up on experiences they missed out on due to the pandemic.
Concerns over inflation and the economy are still present for consumers with 92% of respondents extremely or moderately concerned by the economy and 87% are concerned by their finances.
89% of consumers said they plan to spend less, or not increase their spending on their families this holiday season and 41% will spend less on gifts for friends.
With environmental concerns rising, consumers are also looking for ways to reduce consumption.
The survey found 37% of consumers will purchase less food for celebratory meals to avoid waste this holiday season, and 44% plan to use less festive lighting and decorations at home.
67% of respondents say they are happy to repair their belongings rather than buy new, with 45% saying they care more about the usefulness of the products they buy.
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The survey found 63% of consumers are eager to catch up on missed experiences from the pandemic and one in three will spend more on vacations and activities outside the home.
Overall optimism overrules the concerns of 'experience first' respondents, with 50% of this tribe willing to buy non-essentials, services and experiences to bolster happiness.
Colette Devey, EY Ireland Partner and Consumer Products and Retail Lead, said, "In line with report findings, we have seen Irish consumers grow more cautious over the course of 2022. While fears of a resurging pandemic finally seemed to have lessened, a combination of inflation and increasing energy and household prices are challenging consumer sentiment"
"However, we believe there is still a cohort of Irish consumers who are eager to 'make up for lost time' and who are willing to spend, albeit with discernment, on shared experiences with loved ones over the festive season in a way that wasn't possible at the height of the Covid-19 pandemic," she added.