Penneys’ pulse check: Irish consumers get savvy as they feel the pinch

Penneys launches first ‘Pulse of the Nation’ Index which reveals how the cost of living crisis is weighing most heavily on Irish minds and purses, with women, renters and families most impacted

• Penneys’ first ‘Pulse of the Nation’ Index, with research carried out by Amárach reveals that over half (56%) of people in Ireland are happy with their quality of life, but four in ten feel it has got worse in the last quarter as their finances came under pressure from rising costs.

  • ‘Shecession’: Six in ten of those with the lowest quality of life rating are women who, compared to men, are less content with their financial situation.

  • Irish families are almost twice as likely to have skipped a bill to prioritise other spending (34%) compared to households without children (19%).

  • Renters are feeling the pain when it comes to the cost of living crisis compared to homeowners and are almost twice as likely to be dissatisfied with their financial situation (68% v 39%).

• Penneys also reveals the changing shopping behaviours of the Irish public with a surge in sales of Snuddies (+96% year-on-year increase) and warmer clothing (thermal underwear sales up +55%) as consumers look to control rising heating costs.

• Despite cost of living crunch, one third (36%) of people plan to go on a holiday abroad over next three months with spikes in sales of swimwear (+69%) and luggage (+146%) at Penneys stores across Ireland.

A new Index launched today by Penneys with research carried out by Amárach Research reveals that the cost of living crisis is having a disproportionate effect on the quality of life on some people in Ireland – a person’s financial situation has almost twice the impact on quality of life compared to all other factors. 

Despite the current financial pressures on the public, the Penneys ‘Pulse of the Nation' Index has shown that over half (56%) of people in Ireland are happy with their quality of life, with high levels of satisfaction reported across a range of indicators including family life (82%) and mental health (69%). 

With 37 stores right across Ireland from local towns to city centres and shopping centres, and offering something for everyone, Penneys is uniquely positioned to see how Irish consumers are spending their money and living their lives today. This new regular report will share insights into the shopping behaviours of its customers, the trends the retailer is seeing in its stores and how external factors and pressures are shaping these trends in consumers’ daily lives. 

The first Index has revealed that during this cost of living crisis, the majority of people in Ireland have adapted their behaviour, becoming savvier than ever before with over nine in ten (95%) engaging in money saving hacks. The Index showed that a typical person takes five actions on average to save money, including wearing warmer clothes at home to reduce heating costs (81%) and cancelling entertainment subscriptions (41%). Seven in ten (69%) report that their spending on essential living expenses has increased while over half (57%) of adults have admitted cutting their non-essential spending. In parallel, Penneys has seen increased numbers of customers in its stores searching for quality essential clothing at value prices over recent months.

Money is firmly on the minds of consumers, with large purchases deferred by 62% of adults; 3 in 4 people are switching to more cost-effective service providers and retailers; and worryingly, one in four have admitted to skipping a bill to meet other financial priorities. Despite making these changes, half of adults are still struggling to manage their monthly outgoings.

The Index also includes insights on what Penneys’ customers are buying in its stores, which reinforces in practice how their shopping behaviours and spending habits are changing in response to the cost of living crisis. With eight in ten people admitting to wearing warmer clothing to keep heating bills down, Penneys has seen record-breaking demand for warm cosy clothes during the colder months that can be worn inside the home – items including Snuddies (+96% YoY), thermal underwear (+55%) and velvet plush leggings (+160%) have all soared in recent months. As a result, the retailer offers 115 styles of Snuddies and velvet leggings which are now available in eight colours, including kids sizing, in order to meet high customer demand.

Despite the current financial pressures, people in Ireland are still to looking to enjoy themselves and find some money for the little pleasures in life, with over a third of adults planning a trip abroad over the next three months. Penneys is also seeing huge demand in its stores, much earlier this year compared to previous years, for holiday items such as flip flops (+119% YoY), beach towels (+72% YoY), swimwear (+69% YoY), sunglasses (+42% YoY) and luggage (+146% YoY).

Speaking about the launch of the inaugural Penneys Pulse of the Nation Index, Damien O’Neill, Head of Penneys Ireland and Northern Ireland, said: “We have launched the Penneys Pulse of the Nation Index to understand more broadly how people are feeling, and how savvy and adaptable Irish consumers are becoming in the face of financial pressures. Value, alongside quality, is in our DNA at Penneys and the savvy shopper trend helps explain why we are welcoming new Penneys customers who may not have shopped with us before. Our customers rely on us for great quality affordable essentials which is why we pledged to keep prices low on essential kids’ products last winter. But they also come to us for a feel-good lift and a bargain, whether that’s an affordable pay-day treat, or somewhere to find holiday style for the whole family that won’t break the bank, we know our customers look to us to save money but also to spend money on things that make them feel good.”

Inside the Penneys Pulse of the Nation Index

While the cost of living crisis has touched every household, the Penneys’ Pulse of the Nation Index takes a deeper look and reveals that women, renters and families are feeling the biggest impact on their quality of life. 

‘Shecession’ – Women’s Quality of Life Most Impacted

• The cost of living crisis is taking a disproportionate toll on women, who account for six in ten of those with the lowest quality of life. Women are less content with their financial situation (46%) compared to men (54%) and report lower levels of satisfaction with their mental health (66% female v 72% male) and physical health (56% female v 63% male). Women record higher levels of satisfaction when it comes to connection with their community (81% female v 76% male) and family life (85% female v 80% male).

• Women in Ireland, who make up half the population, have responded quickly to the cost of living crisis. Seven in ten (70%) describe themselves as obsessed with finding the best value compared to over half of men (56%) – increasing to 78% for women with children. 

• The research also indicates that women are cutting back on spending more than men with 64% reducing their spend on non-essential items compared to half of men. 79% of women are treating themselves less often vs 66% of men; almost three quarters (74%) are spending less on socialising compared to 66% of men; approximately nine in ten (86%) are buying less clothing; and women are far more likely to wear warmer clothing or turn on the heat less – 86% of women compared to 76% of men.

  The financial pressures on women weigh heavily on their outlook for the future as they have less confidence in the Irish economy, with six in ten women (63%) having a negative economic outlook compared to just four in ten (41%) of men.

On the bright side, there are some little luxuries that women in Ireland are refusing to give up, with Penneys seeing huge demand in recent months for health and beauty products such as skincare, cosmetics, and fragrances. The so-called “lipstick index” is well and truly alive with sales of lipsticks up 41% versus last year while lip gloss is a clear favourite with sales up 181%. The Irish fake tan phenomenon continues as fake tan is one of the top selling cosmetic lines at Penneys, with the Republic of Ireland accounting for over 60% of the retailer’s global fake tan sales, while every minute Penneys sells 11 packs of false lashes and 19 beauty face masks in its stores. The demand is also seen through Penneys’ in-store beauty studios, where more customers than ever before are treating themselves to manicures, pedicures, facial threading and waxing and eyelash and eyebrow treatments at affordable prices, with a 15% uplift in transactions. 

Renters; Queuing for A Viewing Generation – Juggling Spending Priorities

• Renters are disproportionately feeling the pain when it comes to the cost of living crisis compared to homeowners and are almost twice as likely to be dissatisfied with their financial situation (68% v 39%). It goes beyond their wallets, as they are also twice as likely to be unhappy with their mental health (39% v 22%.) There is a marked contrast in their perceived quality of life, with a significant 22-point gap between both groups (42% with a positive quality of life compared to 64% of homeowners.) They also have a far more negative economic outlook, with 67% of renters expressing a lack of confidence in the economy compared to under half (45%) of homeowners.

• Renters are also finding it harder to manage their finances - almost seven in ten (67%) find it difficult to balance their budget compared to half (48%) of homeowners. They are also doing more to cut their cloth to measure; renters are far more likely to have switched where they buy their groceries (63% v 52% of homeowners) and clothes (38% v 22%), and they are socialising less (76% v 67%) in order to save money.

• Spending a large proportion of their monthly income on rent has also led to differences in spending habits between renters and homeowners. Renters are far more likely to have put off a large financial purchase in the three months covered by the research (77% v 56%). Renters are more likely to have cancelled an entertainment subscription service (56% v 35%); and are treating themselves less often (82% v 68%).

‘Just about Managing Families’ Feeling The Pressure

• ‘Just about Managing Families’ - households with children under 17 - are another cohort highlighted in the Index who are feeling the pressure of the cost of living crisis more than other households. Worryingly, they are almost twice as likely (34%) to have skipped a bill to prioritise other spending compared to households without children (19%). Just half (52%) of these households are happy with their quality of life. 

• Families with children are finding it more difficult to control expenditure on essentials like groceries and utility bills. These families have seen a rise in essential living expenses (74%) compared to other households (66%). This is putting significant financial pressure on them with 63% finding it difficult to manage their money on a monthly basis compared to just under half (49%) of households without children.

• The impact of these pressures shows up in spending behaviours and priorities. Almost three quarters (74%) of families have put off a large purchase compared to over half (55%) of households without children. Four in five (80%) of families are treating themselves less often (v 68% of households without children). eight in ten (80% v 65%) are eating out less and just over half (51% v 36%) are cancelling entertainment subscriptions like Netflix and Sky. 

Penneys identified this trend early during the cost of living crisis and made a commitment last year to freeze prices on more than a thousand essential kids’ clothing items to help families mitigate financial pressures. The value conscious shopper focused on purchasing essential clothing is evident from Penneys’ sales data - the retailer has seen a 12% increase in the sale of its core essentials such as underwear and socks, as Irish customers bought a pack of socks every second and a pack of briefs every three seconds on average. Parents have also been looking for the best value for their babies, with Babygro 2-packs and bodysuits 2-pack sets sold every minute.

Commenting on the research findings, Amárach Chairman Gerard O’Neill added: “This Index helps us see the bigger picture, beyond inflation and other pressures, reflecting how people are feeling about their lives. The Penneys Pulse of the Nation Index has revealed that this is not an ‘equal opportunity’ cost of living crisis as it clearly identifies three key groups – families, women and renters – who are shouldering the financial burden and whose quality of life is impacted the most. It will be fascinating to see how these trends develop in future reports as we monitor the range of factors shaping quality of life and the ongoing efforts of people in Ireland to navigate the cost of living challenge.”

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