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Pulse of the Nation Index Vol 3

CORPORATE NEWS

Penneys’ Pulse Check: Cost of living crunch still impacting Irish consumers and Ireland’s ‘Vibecession’ is evident in spending habits and mood

Penneys has published its latest Pulse of the Nation Index, conducted in partnership with Amárach Research.

  • Ireland’s Vibecession: 39% of the public feel their financial situation has gotten worse over the past year, despite relative improvements in the economy.

  • Families’ Financial Struggles: Two-thirds (61%) of parents admit their wages just about cover their monthly expenses (rent/mortgage, utilities, groceries, etc) and crippling childcare costs, with little or nothing left over for family fun, and 65% of working mums reportedly admit holding off on career promotion opportunities due to their kids.

  • Savvy Shoppers: Majority of public (86%) still taking steps to keep energy bills down, with Penneys’ data revealing that sales of fleeces and velvet fleece-lined leggings are soaring, while demand for kids essential clothing is up and beauty sales spike as consumers look to achieve the ‘no make-up make-up look’ at affordable prices.

Penneys has published its latest Pulse of the Nation Index, conducted in partnership with Amárach Research, a consumer-focused report that highlights the disproportionately negative impact that people’s financial situation has on their quality of life. A stark finding from the latest Index research reveals that almost four in ten (39%) adults in Ireland believe that their financial situation has worsened in the last year and a quarter (25%) believe that their finances will get worse in 2024.

Almost a year on from the first Index, and despite a stronger economic forecast and slowing inflation, the cost-of-living crisis continues to weigh heavily on the mood of Irish public – hence Ireland’s ‘vibecession’, meaning that while there’s an improved economic outlook, the public mood doesn’t match up. Consumers remain cautious with their money with the majority (84%) of adults stating that they are still actively shopping around to find the best value. Key highlights from the latest Pulse Index report reveal:

  • Almost nine in ten (86%) members of the public took steps to manage their energy bills last winter;

  • 71% adults are eating out or getting takeaways less;

  • Almost half of households (47%) have cancelled an entertainment subscription;

  • Almost two thirds (62%) of shoppers have switched to a more affordable grocery retailer;

  • 68% of the general public are treating themselves less and a similar amount (69%) are socialising less in a bid to better manage their household finances.

Penneys’ unique customer sales insights has again reinforced the research findings, as the retailer has seen how shoppers are continuing to wear warming clothing in a bid to keep energy bills under control. Sales of its hero product of the season, velvet fleece-lined leggings soared by 39%, which equates to six pairs of leggings sold every minute in Penneys’ 37 Irish stores. It’s not just women snapping up velvet fleece-lined leggings, such was the demand that the retailer introduced a similar fleece-lined leggings for kids and a ‘long johns’ product for men which has become a firm favourite for layering under clothes and wearing while working and exercising outdoors during cold spells. Penneys also saw huge demand for its women’s fleece jumpers, with over 80 sold per hour in stores.

While shoppers continue to spend sensibly, they are still finding ways to treat themselves when they can. Penneys has seen strong growth in its cosmetic and skincare ranges, with customers investing money into their daily regimes and prioritising a more natural, “no make-up make-up" look. One of the top selling skincare products in this trend is Penneys’ Prep + Protect Vitamin Enriched Moisturising Primer, with a tub of this hero primer sold every minute in Penneys’ Irish stores. Consumers are also being more considered in their pamper product choices, with influences like sustainability proving to being a key factor when making a purchase. For example, Penneys’ reusable cleansing pads have been a stand-out success for customers, with 100 10-packs of the reusable pads sold every hour across Penneys’ stores.

The Penneys Pulse of the Nation Index Infographic

Irish Families Financial Struggles

Following the first Pulse of the Nation Index which found that families are one of the most impacted groups of the cost-of-living crisis, Penneys took a closer look in the latest research to specifically examine why parents are feeling the pressure. This highlights how parents with children under the age of 18 living at home with them have the least confidence in the economy compared to all other demographics, with over half (56%) expressing a negative outlook.

With dependents bringing extra cost to households like childcare and additional groceries, Irish families are struggling with managing their finances and as a result, are far more likely to engage in money saving hacks than the typical consumer:

  • Almost three quarters of parents (73%) are switching to a more affordable grocery retailer compared to the national average (62%);

  • More than six in ten (64%) parents have changed utility provider compared to the national average of 49%;

  • Almost half of adults (47%) have cancelled an entertainment subscription, but families are cord-cutting at a significant rate with almost six in ten (58%) parents of school-going children cancelling a subscription.

When considering a purchase, the Penneys Pulse of the Nation Index found that parents typically can only spend about half of what an adult without a dependent child will. The latest Pulse research has shown how adults without dependent children outspend parents every time across a number of areas:

  • Almost double when eating out – Adults without dependent kids spend an average of €50.97 each at a restaurant compared to an average of €26.44 per person for families;

  • Approximately a quarter more at the cinema – An average of €19.55 for adults without dependents compared to an average spend of €14.88 per person for families;

  • Over double at a sports event – An average of €72.14 for adults without dependents compared to an average spend of €30.98 per person for families.

For many, the main source of this constrained spending is childcare costs. Over half (56%) of the working parents surveyed admitted they had to cut back on family fun to help manage childcare costs. As a result, almost half (48%) of families confirmed they didn’t do as many day trips or activities during the summer last year and a third (34%) of families could not afford to go on holiday abroad. Penneys recognises the financial pressures families face and, last autumn, lowered prices on hundreds of its essential kidswear products in order to help family finances go further at a key time of year. Parents have responded with their wallets, as Penneys’ essentials kidswear range has seen strong growth in recent months, which shows the demand for affordable basics. For example, last season, leisurewear was the strongest growth category with over 80 pairs of kids cuffed joggers sold every hour across Penneys’ stores in Ireland.

The Index also revealed that parents feel like they are being pulled in two directions, with their job and family responsibilities competing against each other. Many parents feel guilty about time spent at work, with 67% expressing they would like to reduce their working hours to spend more time at home. This has a direct impact on their employment opportunities, with over half (55%) of parents admitting they had not put themselves forward for promotion or other roles because of their children. Shockingly, working mums are disproportionately making career sacrifices with 65% saying they have held off putting themselves forward for career opportunities.

Commenting on the latest Pulse of the Nation Index, Head of Penneys Ireland and Northern Ireland Fintan Costello said: “Since the cost-of-living crisis emerged almost two years ago, the appeal of Penneys’ everyday affordability has brought a broader range of customers into our stores than ever before, as value has played on everyone’s minds. This value mindset can be clearly seen in this latest Pulse of the Nation Index, which highlights how shopping around for value is still now firmly embedded in Irish consumer behaviour. We see this in our own stores and consumers’ buying behaviours – specifically parents and women – who are making tough choices and are snapping up value products that either help them manage household costs like heating bills or allow them to treat themselves or loved ones on a budget.

“We are working harder than ever to ensure Penneys is accessible for everyone and a key part of that is keeping our prices low for shoppers, recognising that great value matters now more than ever to families. Consumers in Ireland are continuing to adapt to changing circumstances in our society, and we pledge to continue to support our loyal customers.”

Commenting on the research findings, Amárach Chairman Gerard O’Neill added: “While the macroeconomic picture has improved and the Irish public has benefited from a range of direct supports to offset increasing household costs, the latest Penneys Pulse of the Nation Index has revealed that Ireland appears to be experiencing an interesting trend akin to what the United States has gone through – a ‘vibecession’ - whereby the public mood remains downbeat despite the positive economic indicators.

“While our research has found that the majority of people are relatively happy with their quality of life a person’s financial situation is still having a disproportionate effect on their overall state of mind, with women, families, renters and low-income households being hit the hardest.”

The latest Penneys Pulse of the Nation Index can be downloaded here.

Pulse Infographic - Parental Pressures

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