This is hitting them hard as many expected that this year would see them better off. Ongoing food price surges are sapping the confidence of consumers, the August Credit Union Consumer Sentiment Survey indicates.
Economist Austin Hughes, who oversees the compiling of the survey, said: “Many Irish consumers continue to feel their personal financial circumstances continue to worsen when it had been widely expected that this year would see them clearly better off.”
The latest sentiment survey comes as figures show grocery prices are now rising at close to 6pc, putting a huge strain on household budgets.
The August grocery data from Worldpanel by Numerator shows that Irish shoppers spent €735m on promotional lines during the latest 12-week period.
This is a 9pc increase compared to the previous year.
Worldpanel by Numerator separated from Kantar in June.
The data company said grocery inflation continued to rise, increasing from 5.43pc in the previous 12-week period to 5.86pc now.
Higher spending on promotional items was recorded for alcohol, frozen foods and household items.
The survey found that 60pc of consumers say they are spending more on groceries and other household bills than a year ago.
And the vast majority of these consumers say that the extra spending is due to higher prices.
Survey respondents said they are spending more now than a year ago on necessities such as food and household bills, and less on discretionary items and going out.
Close to half of respondents (47pc) said they are spending less on going out than last year, with 22pc spending more.
More than a third are spending less on discretionary items, the survey found.
Pressure on living costs has been a painful and persistent difficulty for many Irish consumers
Consumer sentiment continues to be negative, but they are slightly less nervous about the economic outlook as an apparent tariff deal appears to have avoided a worst-case scenario, according to the survey.
Food price pressures are driving a further weakening in sentiment towards household finances.
Mr Hughes said there was a surprising pick-up in spending plans.
This likely reflects summer sales, school costs and sunshine-related spending, he said.
“While trade wars have posed a large but still latent threat to the Irish economy in recent months, pressure on living costs has been a painful and persistent difficulty for many Irish consumers,” Mr Hughes said.
The economist added that the August survey period saw a renewed focus on rising prices, with a particular spotlight on a persistently fast rise in grocery prices.
“This prompted a further weakening, albeit relatively limited, in those elements of the survey dealing with household finances,” he said.
He said consumers are finding food price rises “threatening”.
The period saw a fractional easing in Ireland’s inflation rate to 1.7pc in July.
However, there was a further pick-up in food price inflation to 4.6pc – the fastest pace since December 2023.
Mr Hughes said this was continuing a trend pick-up evident through the first half of this year after a previous slowdown in food price inflation during last year.
source