SHOPPERS SURVEY:BACK IN 2005, most of us – particularly those of us with access to cheap and easy credit – were still thrilled skinny to be the economic envy of Europe.
We were assured by our political masters that the good times would keep rolling and even if they didn’t, we had the softest of soft landings to look forward to.
Fast-forward five years and an almost impenetrable black cloud sits over the country. We have moved from being Europe’s economic powerhouse to its basket case and the soft landing we were promised disappeared faster than a truckload of money poured into the coffers of Anglo Irish.
While there is undoubtedly much to be glum about, at least we can take some comfort from research carried out by the National Consumer Agency (NCA) which indicates that the hard times have knocked some sense into us when it comes to spending money.
The research, focussing on how Irish consumers are coping with the recession and how empowered consumers here feel, shows that there have been dramatic changes in our shopping habits since 2005 when the last major study into Irish shopping habits was carried out.
Five years ago the Government commissioned a Consumer Strategy Report (CSR) in the wake of a growing sense of unease at how people were being treated by service providers and retailers. The report made for grim reading and it declared that as consumers we were lazy, ripped off, unwilling to complain and confused.
We were living in the most expensive country in the euro zone for food, soft drinks, tobacco and rent and the second dearest for alcohol, restaurants and pubs. But high prices were not the only problem. An unwillingness to look hard for better value or better service gave retailers and service providers the opportunity to fleece us or ignore our pleas for help as they knew that we would stick with them no matter how badly we were treated.
As consumers we knew little of our rights and found the legislative protection on offer both complex and confusing. There was also an absence of consumer advocacy. The well-meaning Office of the Director of Consumer Affairs did little more than launch a few prosecutions against individual retailers and publicans who it found guilty of overcharging each year. The guilty were fined peanuts and that was that.
In response to the report, the Government established the NCA and gave it new powers of investigation. While the agency is understaffed and underfunded it has done commendable work in highlighting the rights consumers have and its shopping surveys have made the rip-off prices some retailers charged for groceries in the Republic undeniable and headline news.
Its new research which was compiled earlier this summer says Irish consumers are price conscious, thrifty, more willing to complain and better money managers. Crucially, the passivity which was once our hallmark has gone. Characteristics of the new consumer include a willingness to shop around for better prices – three quarters of Irish consumers are actively looking around for better value.
We have also become a whole lot more thrifty, admittedly not so much out of choice but necessity. According to the NCA, 72 per cent of consumers say the recession has focused them on thinking carefully about what they buy.
In 2005 quality, value and prices (in that order) were the key influences in determining whether or not a consumer shopped around. The new consumer has substantially modified their purchasing behaviours and price has replaced quality as the principal influencing factor in deciding where to shop. Some 70 per cent of those asked say it is the most important thing while 81 per cent of grocery shoppers now want long-term lower prices rather than special offers and promotional deals.
People are also more confident about their consumer rights and more willing to complain. The research, which was conducted by the NCA in June, indicates that consumers are more empowered and more informed. It says that 73 per cent of consumers are more confident about their rights than they were five years ago.
Back then 83 per cent of people believed they should complain more but the vast majority of people believed the complaint process was so lengthy that they did not bother. Fast forward five years and 80 per cent of consumers say they have complained — the highest level since the NCA commenced tracking Ireland’s complaining behaviour.
The NCA also found that three out of four people said that they would continue to shop around for good deals after the current turbulent economic situation calms. This determination not to get fooled again view is particularly marked amongst 25-34 year olds, where 83 per cent say they would shop around even when – or if – the money tree bears fruit again.
These changes have come about as a result of a combination of factors. The changed economic environment has obviously had the most impact but the role the NCA and the media have played has also been significant in empowering consumers, says the NCA chief executive Ann Fitzgerald.
“We in the NCA obviously think we have played a major role in improving consumer awareness since but so too has the media. Five years ago there were very few journalists focusing on consumer affairs. There has been a significant build-up of interest in this area.”
Fitzgerald says the new consumer should be commended and she expresses the belief that “when better times come they will not relinquish these new, more savvy, grown-up habits. We have learned a major lesson, it has been a very tough lesson, undoubtedly, but our research shows it is one that people – particularly young people – are unlikely to forget. People aged under 25 today were, effectively cossetted throughout their life. They had never lived through a recession.”
Fitzgerald cautions against regulatory authorities or the media resting on their laurels. “We have to keep doing this. The key area in the coming months is price transparency. It is still something which concerns us, particularly in the professional sector. The greater the transparency the better it is for all consumers.” Fitzgerald says confident consumers are more likely to complain and more of them are reporting satisfactory outcomes as a result.
“Even since 2008 there has been an improvement here,” she says. “Of the consumers who complained to companies in 2008, 66 per cent reported a satisfactory outcome. Today that stands at 71 per cent. People are taking a more grown-up approach.” Another key finding of the research shows that consumers are continuing to switch product and service providers and when they do, they save money.
According to the agency, 92 per cent of people who have switched electricity suppliers over the past 18 months have saved money while 88 per cent of those who moved house insurance found their outgoings reduced.
Some 84 per cent of car insurance switchers got better value elsewhere while 76 per cent of those who switched mobile operators did likewise.
The oddest finding of the report, perhaps, is that despite the recession and the relentlessness of the bad news that confronts Irish consumers each week, so many of us remain upbeat. The NCA says that 70 per cent of consumers are enjoying life as much as they did at the height of the boom and when asked how they anticipated things would be for the country in 12 months time, the most frequently cited response was “Better” God bless their optimism.
The smart new consumer is:
Willing to shop around.Three quarters of Irish consumers actively look around for better value.
Less impulsive.Most shoppers think carefully about what they buy.
Price sensitive.Seven out of 10 people say price is the most important thing
Looking for long term value.Shoppers are looking for long-term lower prices rather than special offers and promotional deals.
Up to speed on their rights.People are more willing to complain.
Smart for the long haul.Three out of four people said that they would
continue to shop around for good deals even once the current turbulent economic situation calms
