Consumers need ‘peace of mind’

CONSUMERS need certainty on what’s coming down the track or else they’ll continue to keep their money stashed away.

This is according to the professor of marketing at UCD Smurfit School, Mary Lambkin, who pointed out that consumer spending is still in freefall.

Professor Lambkin said there is “loads of money” on deposit in Ireland, adding that people are afraid to spend.

“Consumers need some peace of mind and the Government must to do that,” she said.

The UCD Smurfit School/Marketing Institute of Ireland’s quarter two consumer market monitor indicates a bleak spending outlook and points out that it is very difficult to see where any recovery can come from, in view of the fact that the number of people in employment is continuing to fall and disposable incomes are being eroded by price increases and additional taxes.

“The latest official forecast by the Central Bank is for consumer spending to level off in 2012 at — 0.6% with a return to growth of about 1% per annum after that.

“It would be nice to believe that this is correct but reality suggests a less favourable picture against a continuing downward trend in incomes and employment,” said professor Lambkin.

Also residential mortgage lending, which accounts for 85% of all personal sector credit, is reported by the monitor to continue to drop in 2011 with loans to households down 4.8% year on year to May 2011.

Loans for house purchases were 2.1% lower, while lending for other purposes dropped 13.6%, which the report said shows consumers are reluctant to borrow and prefer to either save or pay off their current debts.

Meanwhile, a National Consumer Agency survey found that nine out of 10 Irish consumers who had cause to complain about a purchase in the last year did so and that 93% of those complaints were partially or wholly resolved to the customers’ satisfaction.

The research also showed that 85% of consumers are willing to complain and of those who did, 78% said that they found the complaints process somewhat or very easy.

Chief executive of the NCA, Ann Fitzgerald said that the results point to an important shift in the dynamic between consumers and the businesses that serve them.

“Previously, we saw a greater reluctance to complain — in 2008 just seven in ten dissatisfied consumers actually did anything about their retail problems, whereas today more than 90% of consumers tell us that they did make a complaint where a product or service was not to their satisfaction,” she said.