A third monthly marginal improvement in consumer confidence is more suggestive of a limited rebound than any lasting recovery, according to a survey.
KBC Bank Ireland’s latest monthly consumer healthcheck shows a small rise in sentiment in July, following larger gains in both May and June, and said Irish consumers remain “anxious”.
“The July survey emphasises the need for a July stimulus package that credibly improves the outlook for activity and employment,” said KBC chief economist Austin Hughes.
Mr Hughes said this week’s summer stimulus plan needs to be “strong in signal as well as substance” and must convince people that the economy is on a solid-but-safe path to lasting recovery rather than a limited short-lived rebound.
The July consumer sentiment survey points to the continuing fragility of current economic circumstances in Ireland and elsewhere," he said.
"While there is a strong sense that we have moved past the worst in terms of dislocation, the relief that propelled the May and June surveys forward has been tempered by renewed concerns in regard to large and lasting damage to the outlook for activity and employment."
Meanwhile, a study by PwC has shown how Covid-19 has “fundamentally changed” how consumers shop and live.
It shows that more than a third of people, globally, expect to spend less money in the months ahead, while the shift to online or mobile purchasing has shot up – with 45% of people now shopping via mobile for non-food items versus 30% before the onset of Covid-19.
“Based on our experience, the position in Ireland would mirror these global findings,” said John Dillon, head of retail and consumer practice at PwC Ireland.
For companies that cater to the end consumer, the future is arriving faster than anyone imagined. Digital trends that had already been transforming consumer behaviour a few short months ago have accelerated.
"Businesses need to understand how the new normal affects all their customer touchpoints if they are to reinvent their own future, and not be at the mercy of external events,” he said.
“Despite the digital shift, it would be premature to write off physical stores — even though retail foot traffic has plunged during lockdown, our research shows that half of urban consumers still say their in-store shopping activity for non-food items since the outbreak has stayed the same or increased. However, this pattern needs to be monitored in the coming months as we understand more about the virus and its transmission levels,” said PwC’s Owen McFeely.