Table of Contents
Issues in the Market
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- Key themes in the market
- Definitions
- Abbreviations
Future Opportunities
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- Boom comes to an end
- But what now?
- Recession accelerating existing trends – not creating new ones
- The State We're In
- First, some evidence
- The response
- The best of
- Sustained ad spend pays off in the long run
- Promotional discounting threatens brand value
Lifestyles in Brief
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- Both economies deep in recession – with no recovery imminent
- Consumer confidence close to all-time lows
- Full employment gives way to rampant job losses
- Disposable income under strain, affecting spending
- Extravagant lifestyles during boom years, but prudently financed
- Weakness of Sterling sparks cross-border shopping craze
- Greater price-consciousness on account of recession
- Irish consumers still drinking alcohol – but spending less on it
- Recession-ravaged foodservice sector down by up to 20%
- Growing preference for ‘staying in’ over a ‘night out’
- Banks’ reputations in the spotlight
- Savings habit growing stronger among Irish consumers
- Price-consciousness to be a feature into the future
- More consumers unaffected than significantly affected by recession
- Twice as many NI as RoI consumers ‘unaffected’
Restoring Confidence: Economic Outlook for NI and RoI
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- Key points
- Economic downturn: where did it all go wrong?
- Overview
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- Figure 1: Economic outlook for NI and RoI, 2008-10
- RoI
- NI
- Stability more than recovery at stake?
- RoI
- UK (incl. NI)
- Unemployment
- RoI
- NI
- Spectre of unemployment curbs consumers’ enthusiasm
- What job?
- Disposable income
- RoI
- NI
- Consumer spending
- RoI
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- Figure 2: Agreement with ‘I’ve been saving more and spending less’ as a result of the recession, by working status, RoI, May 2009
- NI
- Now is a good time to spend – just not for me
- Definite change in attitude towards spending
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- Figure 3: Agreement with selected spending-related statements, NI and RoI, May 2009
Social Impact of Recession
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- Key points
- Severe cuts in government spending to impact upon consumers
- RoI
- NI
- Certain areas more severely affected than others
- By-products of a recession: Anxiety, ill health and social disarray
- Recession causing sleepless nights
- Personal relationships under strain
- Numbers under financial pressure on the rise
- Fears over 1980s-esque ‘brain drain’
- Risk of increased suicide rate
- Homeless services at ‘full capacity’
- Increasing crime linked to recession
- Growing discontent among public
- An era of volunteering to commence
- An end to multicultural Ireland?
- Women going blonde, men going tight
Understanding the Irish Consumer Shopping Psyche
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- Key points
- Were we living beyond our means?
- Taste for luxury and extravagance was common…
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- Figure 4: Agreement with attitudes towards luxury, NI and RoI, 2008
- …but this extravagance was financed with caution
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- Figure 5: Agreement with selected statements relating to finance (positive), NI and RoI, 2008
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- Figure 6: Agreement with selected statements relating to finance (negative), NI and RoI, 2008
- Outlook for luxury goods market
- Falling value of Sterling turns retail landscape on its head
- Cross-border grocery trade valued at £450 million in 2008
- Cross-border shopping to reach €700 million in 2009
- Consumer footfall: Down in RoI, up in NI
- Even low-cost retail behemoths suffering
- Quality over budget when buying clothes during downturn
- Consumers sticking to what they have – rather than buying again
- More grey hair and wrinkles on display in downturn
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- Figure 7: Agreement with ‘I spend less on personal appearance’, by age, NI and RoI, May 2009
- Will ethical concerns recede in line with the economy?
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- Figure 8: Agreement with statement ‘I buy fair trade products when available’, NI and RoI, 2003-08
- Downturn increasing price awareness
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- Figure 9: Agreement with ‘I make more effort to get the best deal’ as a result of the recession, by gender and age, NI and RoI, May 2009
- Some evidence of pre-recession price-consciousness
- Value for money over premium the priority in 2008
- Own-label brands not convincing consumers
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- Figure 10: Agreement with ‘I buy more own-label brands’ as a result of the recession, by gender, NI and RoI, May 2009
- Discount retailers growing share in RoI
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- Figure 11: Agreement with ‘I shop more at discount retailers’ as a result of the recession, NI and RoI, May 2009
- More difficult to counter ‘recession fear’ in internet age
- Confidence booster needed
- The need for consumers to feel ‘in control’
- Brand switching a feature of downturn
- But some resistance to unfamiliar brands
Sector Focus: Alcohol
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- Key points
- Penetration stable but spending in decline
- Around 80% of Irish consumers are drinkers
- Spending on alcohol in decline
- Increasing unemployment likely to reduce frequency of consumption
- Position of pubs under threat
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- Figure 12: Agreement with ‘I go out to the pub less’ as a result of the recession, by gender and age, NI and RoI, May 2009
- Drinking at home growing in popularity
- On-trade sales in decline, while off-trade sales holding their own
- Off-trade sector the new focus for drinks companies…
- …but tradition still counts for consumers
Sector Focus: Foodservice and Groceries
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- Key points
- Credit crunch and lifestyle trends hitting foodservice sector
- Restaurants the big losers from credit crunch
- Home cooking as a cost-cutting measure
- Increasing health awareness affecting food buying
- Unemployment rendering consumers time-rich but cash-poor
- Growing interest in ‘home growing’
- Chocolate consumption the clear ‘recession winner’
Sector Focus: Leisure and Entertainment
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- Key points
- Staying in is the new going out
- Tendency to ‘stay put’ benefiting food delivery sector
- Cinema growing in popularity as option for a night out
- Spending time with family tops all other options
- Craze for multiple holidays loses steam
- Shaper price focus for domestic holidaymakers
- Late bookers hoping to snare bargains
Restoring Confidence in Financial Services and Products
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- Key points
- Erosion of wealth to impact on financial services providers
- Consumers taking dim view of banks’ antics
- Evidence of loss of trust in institutions
- Banking on reputation
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- Figure 13: Important factors (selected) when choosing a current account provider, NI, 2004-08
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- Figure 14: Important factors (selected) when choosing a current account provider, RoI, 2004-08
- Eroded loyalty to lead to ‘bank hopping’?
- Bad reputation
- Opportunity for credit unions to grow market share
- Irish consumers not ‘up to speed’ on financial matters…
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- Figure 15: Pension ownership (company and individual), NI and RoI, 2003-08
- …but savings habit growing stronger in RoI
- Reluctance to commit suggests uncertainty
- ‘Rainy day’ the main purpose of saving
- Security over returns for RoI consumers
- Little interest in financial services advertising
- Overdraft facilities as a form of sneaky credit
- Cash-strapped consumers may look to credit cards for quick fix
- No complacency, despite familiarity
- Tendency towards full payment indicates high level of prudence
- Danger that downturn will expose ‘cracks’ in consumers’ credit card usage
- Insurance products could be first target of consumer cutbacks
- Recession having huge impact on mortgage sales
- RoI
- NI
The Consumer – The Lasting Impact of the Recession
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- Key points
- Trust no one
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- Figure 16: Lasting impression of recession on consumers, NI and RoI, May 2009
- Changed attitudes towards finances and financial services
- High level of distrust among RoI consumers
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- Figure 17: Agreement with ‘I am less trusting of banks/financial institutions’ since the recession/credit crunch, NI and RoI, by gender and age, May 2009
- Consumers intend taking control of own finances
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- Figure 18: Agreement with The recession/credit crunch ‘has been a wake-up call to get more involved with my finances’, NI and RoI, by age, May 2009
- Bubble not quite burst on property obsession
- There’s no place like home
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- Figure 19: Agreement with ‘I won’t rely on property for my future financial security’ as a result of the recession/credit crunch, by gender and age, NI and RoI, May 2009
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- Figure 20: Agreement with ‘I want the freedom of renting rather than having a mortgage’ as a result of the recession/credit crunch, by gender and age, NI and RoI, May 2009
- Epidemic of panic has been overstated
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- Figure 21: Agreement with ‘I worry about my children’s financial future’ on account of the recession/credit crunch, by gender and socio-economic background, NI and RoI, May 2009
- Leisure
- Holidaying at home not deemed to be worth the savings
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- Figure 22: Agreement with ‘I am more likely to holiday at home to save money’ as a result of the recession/credit crunch, by gender and age, NI and RoI, May 2009
- Impact of recession on lifestyles
- More ‘unscathed’ than ‘savaged’
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- Figure 23: Impact of recession/credit crunch on consumers’ lifestyles/standard of living, NI and RoI, May 2009
- Under-50s, in employment, feeling the brunt
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- Figure 24: Agreement with ‘I will have to make major changes to my lifestyle/standard of living’ as a result of the recession/credit crunch, by age, NI and RoI, May 2009
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- Figure 25: Agreement with ‘I will have to make major changes to my lifestyle/standard of living’ as a result of the recession/credit crunch, by gender and working status, NI and RoI, May 2009
- Retired and over-65s faring best
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- Figure 26: Agreement with The recession/credit crunch ‘has had little/no impact on my lifestyle’, by age, NI and RoI, May 2009
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- Figure 27: Agreement with The recession/credit crunch ‘has had little/no impact on my lifestyle’, by gender and working status, NI and RoI, May 2009
- Going after the grey market
- Retail/Shopping habits
- Around a third to cut back on premium brands
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- Figure 28: Agreement with ‘I will think twice about spending more on premium/expensive brands’ as a result of the recession/credit crunch, by gender and socio-economic background, NI and RoI, May 2009
- Price to assume greater importance in food shopping
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- Figure 29: Agreement with ‘Saving money has become my main priority when food shopping’ as a result of the recession/credit crunch, by gender and age, NI and RoI, May 2009
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- Figure 30: Agreement with ‘I will buy more locally produced goods to protect Irish/NI jobs’ as a result of the recession/credit crunch, full-time worker vs. housewife, NI and RoI, May 2009
Consumer Typologies
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- Key points
- NI
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- Figure 31: NI consumer typologies, May 2009
- Not Affected
- Characteristics
- Demographic pattern
- Understanding the Not Affected
- Savers
- Characteristics
- Demographic pattern
- Understanding the Savers
- Discounters
- Characteristics
- Demographic pattern
- Understanding the Discounters
- Financially Worried
- Characteristics
- Demographic pattern
- Understanding the ‘Financially Worried’
- RoI
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- Figure 32: RoI consumer typologies, May 2009
- No Trust
- Characteristics
- Demographic pattern
- Understanding the No Trust
- Discounters
- Characteristics
- Demographic pattern
- Understanding the Discounters
- Ignoring Problem
- Characteristics
- Demographic pattern
- Understanding the Ignoring Problem
- Not Changed
- Characteristics
- Demographic pattern
- Understanding the Not Changed
- Bargain Hunters
- Characteristics
- Demographic pattern
- Understanding the Bargain Hunters
Appendix
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- Economic outlook
- Global downturn
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- Figure 33: Overview of global economic downturn, 2008
- Labour market – NI
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- Figure 34: Key labour market indicators, NI, Q4 2008
- Redundancies – RoI
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- Figure 35: Number of redundancies, by month, RoI, 2008 and 2009
- Disposable income
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- Figure 36: Expectation of household income in six months’ time, UK (incl. NI), 2008 and 2009
- Consumer confidence
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- Figure 37: Consumer confidence index and sub-indices, RoI, 2008-09
- Figure 38: Consumer sentiment index and sub-indices, RoI, 2005-09
- Figure 39: Consumer confidence index and sub-indices, UK (incl. NI), 2008-09
- Consumer spending
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- Figure 40: Consumers’ view of whether now is a good time to buy major goods (such as house or car) or household goods (such as white/brown goods), UK (incl. NI), 2008 and 2009
- Social effects
- Multicultural Ireland
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- Figure 41: Estimated number of inmigrants to RoI, 2000-08
- Figure 42: Estimated international migration inflows, NI, 2000/01-2000/07
- Hours worked
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- Figure 43: Average hours worked per week, NI and RoI, 2004-08
- Issues of concern
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- Figure 44: Issues of most concern to consumers during the current economic situation, NI and RoI, January 2009
- Retail/Shopping habits
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- Figure 45: Agreement with statements relating to how consumers have been affected by the credit crunch, NI and RoI, May 2009
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- Figure 46: Agreement with statements relating to how consumers have been affected in the long term by the recession, NI and RoI, May 2009
- Market for luxury goods
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- Figure 47: Global luxury goods, 2005-10
- Pre-recession price-consciousness
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- Figure 48: Agreement with statement ‘I always look out for special offers’, NI and RoI, 2002-08
- Figure 49: Agreement with statement ‘I look for the lowest possible price when shopping’, NI and RoI, 2002-08
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- Figure 50: Agreement with statement ‘I decide what I want before I do the weekly shopping’, NI and RoI, 2002-08
- Figure 51: Most important factors when grocery shopping (incl. alcohol), NI and RoI, January 2009
- Brand switching and openness to new products
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- Figure 52: Agreement with ‘I like changing brands’, NI and RoI, 2007 and 2008
- Figure 53: Agreement with ‘I only buy trusted products, ones I know’, NI and RoI, 2007 and 2008
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- Figure 54: Agreement with ‘I’m tempted to buy products I’ve seen advertised’, NI and RoI, 2003-08
- Internet and shopping
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- Figure 55: Agreement with ‘To do my shopping by internet makes my life easier’, NI and RoI, 2003-08
- Cross-border shopping: exchange rate changes
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- Figure 56: Sterling to euro exchange rate, 2003-09*
- Alcohol retailing
- Alcohol consumption
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- Figure 57: Alcohol consumption, NI and RoI, 2003-08
- Frequency of consumption
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- Figure 58: Frequency of alcohol consumption, NI and RoI, 2008
- Figure 59: Proportion of consumers who have consumed (and frequency) alcohol in last 12 months, by working status, NI, 2008
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- Figure 60: Proportion of consumers who have consumed (and frequency) alcohol in last 12 months, by working status, RoI, 2008
- Consumption: On-trade vs off-trade
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- Figure 61: Agreement with statement: ‘Most of my drinking is done at home’, NI and RoI, 2003-08
- Alcohol sales
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- Figure 62: Alcohol sales, by indexed value on- and off-trade, all-Ireland, 2003-13
- Foodservice and groceries
- Trend towards home cooking
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- Figure 63: Agreement with selected food/lifestyle statements, NI and RoI, 2008
- Health awareness
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- Figure 64: Consumer agreement with statement ‘I don’t pay sufficient attention to what I eat’, NI and RoI, 2007 and 2008
- Figure 65: Agreement with ‘I don’t have time to spend preparing and cooking food’, NI and RoI, 2003-08
- Foodservice sectors
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- Figure 66: Foodservice value of purchases, by sector, IoI, 2008
- Foodservice as percentage of food retail sales
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- Figure 67: Foodservice as percentage of food retail sales, all Ireland, 2003-08
- Leisure
- Eating out in restaurants
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- Figure 68: Agreement with the statement: ‘I enjoy splashing out on a meal in a restaurant’, NI and RoI, 2003-08
- Visiting the pub
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- Figure 69: Agreement with statement: ‘I really enjoy a night at the pub’, NI and RoI, 2003-08
- Preference for night at home
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- Figure 70: Agreement with statement ‘I prefer to spend a quiet evening at home than to go out’, NI and RoI, 2003-08
- Spending time with family
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- Figure 71: Agreement with ‘I enjoy spending time with my family’, NI and RoI, 2004-08
- Population aged <25 years
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- Figure 72: Percentage of the population under the age of 25, by country/region, 2010
- Finance
- Savings intentions – RoI
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- Figure 73: Savings intentions, RoI, 2008 and 2009
- Savings preferences
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- Figure 74: Desire access to savings/how long prepared to tie up savings, RoI, March 2009
- Information on banking needs
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- Figure 75: Preferred method of receiving/gathering information on banking needs, RoI, June 2008
- Issues of concern when saving
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- Figure 76: Main issue of concern when saving, RoI, 2008 and 2009
- Figure 77: Consumer confidence in security of savings, RoI, 2008 and 2009
- Figure 78: Main motivation for saving, RoI, 2008 and 2009
- Credit cards – usage and management
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- Figure 79: Credit cards – average monthly spend, NI and RoI, 2008
- Frequency of credit card usage
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- Figure 80: Frequency of credit card usage, NI and RoI, 2008
- Credit card – settling of balance
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- Figure 81: How credit card balance settled, NI and RoI, 2008
- Use of credit card
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- Figure 82: Reasons (selected) for using a credit card, NI and RoI, 2008
- The Consumer: The lasting impact of the recession
- Changed attitudes towards finances and financial services
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- Figure 83: Agreement with The recession/credit crunch ‘has been a wake-up call to get more involved with my finances’, by gender and socio-economic background, NI and RoI, May 2009
- Figure 84: Agreement with ‘I wont rely on property for my future financial security’ as a result of the recession/credit crunch, by gender and socio-economic background, NI and RoI, May 2009
- Changed attitudes towards retail/shopping habits
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- Figure 85: Agreement with ‘I will think twice about spending more on premium/expensive brands’ as a result of the recession/credit crunch, by gender and full-time workers vs. housewife, NI, May 2009
- Figure 86: Agreement with ‘Saving money has become my main priority when food shopping’ as a result of the recession/credit crunch, full-time workers vs. housewife, NI and RoI, May 2009
- Figure 87: Agreement with ‘I will buy more locally produced goods to protect Irish/NI jobs’ as a result of the recession/credit crunch, by gender and socio-economic background, NI and RoI, May 2009
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- Figure 88: Agreement with ‘I will buy more locally produced goods to protect Irish/NI jobs’ as a result of the recession/credit crunch, by gender and age, NI and RoI, May 2009
- NI
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- Figure 89: Agreement with statements relating to how the recession has affected consumer lifestyles in the past three months, by detailed demographics, NI, May 2009
- Figure 90: Agreement with statements relating to how the recession has affected consumer lifestyles in the past three months, by detailed demographics, NI, May 2009
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- Figure 91: Agreement with statements relating to the lasting effect the credit crunch has had, by detailed demographics, NI, May 2009
- Figure 92: Agreement with statements relating to the lasting effect the credit crunch has had, by detailed demographics, NI, May 2009
- RoI
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- Figure 93: Agreement with statements relating to how the recession has affected consumer lifestyles in the past three months, by detailed demographics, RoI, May 2009
- Figure 94: Agreement with statements relating to how the recession has affected consumer lifestyles in the past three months, by detailed demographics, RoI, May 2009
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- Figure 95: Agreement with statements relating to the lasting effect the credit crunch has had, by detailed demographics, RoI, May 2009
- Figure 96: Agreement with statements relating to the lasting effect the credit crunch has had, by detailed demographics, RoI, May 2009
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