When it is eventually broadcast, RTÉ’s Reeling in the Years for 2020 will be as terrifying as it is depressing, and so long that it will most likely have to be screened over several days – without any breaks.
Since the beginning of the year we have had the formal moment when Brexit (remember that?) became a reality, and Donald Trump became only the third president in US history to be impeached and was subsequently acquitted. Then there was the general election at home which saw Sinn Féin win more support than any other party but not quite enough seats to form any part of a Government. Protracted negotiations saw Fianna Fáil and Fine Gael bury the hatchet somewhere other than each other's backs after almost 100 years and form a coalition with the resurgent Green Party.
There's no significant change in those planning to keep cutting or to stay frugal
The programme will also have to focus on the widespread social unrest in the US and the growth of the Black Lives Matters movement and – of course – the US presidential election which is coming down the tracks and could shape the world for decades to come.
Oh, and there was the pandemic. Covid-19 has already killed close to a million people across the world and brought the global economy to its knees and reshaped almost every aspect of our lives from how we interact with others and how we shop to where we travel and what we eat.
Virtually every single event – from global sporting events such as the Olympics to holidays, weddings, communions, graduations and even wakes on more localised stages all over the world had to be cancelled or postponed. A gala golf dinner in Clifden went ahead, convulsing the country in a political storm it really could have done without right now.
Almost since the crisis began, forecasters have been poring over the runes – or should that be ruins – to try and get a sense of how consumer behaviour has been changing and how enduring that change is likely to be.There are growing signs that Irish consumers are settling in for the long haul and any optimism that the crisis may go just as soon as it came is fading.
Last week KBC Bank Ireland published its latest consumer sentiment index – a measure of how we all feel about the state we're in – and it notes that our world view slipped in August on fears of a renewed spike in cases of Covid-19. It was the first decline since April when the index dropped to its lowest level since October 2008.
“The August sentiment results do suggest any improvement now under way in the circumstances of Irish consumers is uneven and tentative,” the bank’s economist Austin Hughes said. “There have been some very positive elements in recent spending data that, together with the trend in consumer confidence in recent months, point to a clear turnaround in sentiment and spending from April’s low point. However, the muted survey results for both July and August suggest that we may be seeing a limited rebound rather than the first signs of a lasting recovery in Irish economic conditions.”
The increased gloom is also evident in the latest research published by the financial and professional services giant, EY. During the crisis its researchers have been publishing data reflecting how consumer attitudes have been shifting, and at the beginning of the summer its Future Consumer Index placed Irish consumers into four categories, “cut deep”, “stay calm, carry on”,”save and stockpile” and “hibernate and spend”.
Fast forward four months to the end of the summer and it appears that people are becoming more careful with their money as the reality of the scale of the crisis really bits home.
Panic spending
While there was an element of panic spending in the early stages of the crisis, the latest EY Future Consumer Index has revealed a growing mood of financial conservatism, indicating that consumers are becoming increasingly cautious with their money, with many “hunkering down” for the duration of the crisis.
At the start of the crisis people appeared willing to spend all around them – or at the very least pile their supermarket trolleys high as we headed into a period of almost unprecedented uncertainty – and it appeared that people were less price sensitive than they might normally be.
However the latest study shows that 54 per cent of those surveyed believe price is a more important purchasing criteria than it was a month ago while 61 per cent say they are more aware and more cautious of their spending with a similar percentage saying they are more focused on value now than they were earlier this summer.
It is also clear that people are asking more and harder questions about their purchasing decisions with a further 64 per cent saying they would not buy products they don’t need, something which signals a significant drop in discretionary spend. The study also shows that almost one in two people are now postponing the purchase of big-ticket items.
"We've been tracking the impact of the Covid-19 pandemic on consumers around the world for four months now, and it's clear that the road to any kind of post-pandemic normality will be a long and winding one," says EY's Yvonne Kiely.
“Some countries are continuing to move forward, but only in small and tentative steps. Yet in many places the steady groundswell in consumer confidence we were seeing has slowed, stopped or slipped into reverse.”
Kiely says this is all reflected in its consumer segments, “which are tilting towards those that represent higher degrees of spending conservatism. Globally, the percentage of consumers in our ‘stay calm, carry on’ segment doubled between May and June, but it’s now stuck at that level. Likewise, the percentage in our ‘cut deep’ segment was falling fast, but this has now stabilised.
She says that many governments “are urging consumers to get out and spend, but many consumers are deciding they’d rather not – or not yet. When we ask consumers about their future intentions, there’s no significant change in those planning to keep cutting or to stay frugal”.
Kiely points to the 64 per cent of consumers who say they won’t buy products that they don’t feel they need, even if it means they miss out on the latest trends; and the 45 per cent who “expect that buying what they want won’t be an option for them – they will just buy the essentials. This suggests that many consumers are hunkered down for the duration of the crisis”.
She says the index is also pointing away from brand names to a pivot towards private label products “that is likely to prove deeper and more lasting than normally seen in a downturn”.
The surge in at-home consumption which was evident in the early stages of the crisis as restaurants were forced to close and come up with innovative ways to get their food to diners looks to be with us for some time with 41 per cent of consumers still feeling “uncomfortable about going out to eat” . A further 45 per cent plan to keep their cupboards stocked with an excess supply of household staples such as cleaning and paper products and basic groceries.”
The index suggests premium pricing will become harder to maintain. “As more consumers shift their focus to price, they are less willing to pay a premium for most attributes, such as whether a product is ethically or sustainably sourced,” she says.
She suggests that the four segments identified could morph into five very different ones as the crisis abates. For example, the index currently suggests that over time, most consumers in the “save and stockpile” segment will migrate to two new segments: “remain frugal” and “cautiously extravagant”.
These new consumer segments, detailed in the index, could emerge post-Covid-19 and be summarised as: “keep cutting” (8 per cent); “stay frugal” (21 per cent); “get back to normal” (40 per cent); “cautiously extravagant” (20 per cent) and “back with a bang” (11 per cent).
A third report looking at how consumers are viewing the crisis has also been published recently. This one has come from fintech company N26. It is a global survey which included more than 1,000 Irish people.
It makes for glum reading. It found that 2020 was set to be a big year for consumers worldwide, with 67 per cent of people globally saying they had major purchases or life events planned.
However a massive 80 per cent of Irish people with big plans for 2020 were forced to cancel or postpone them as a result of the pandemic with 47 per cent saying they had lost money as a result of the raft of cancellations. The average amount of money lost was put at just under €700.
