Ahead of Core Research’s Consumer Mindset report next week, Finian Murphy, marketing director asks Where is the Hopeful Leader?
In January 2022, the Consumer Sentiment Index, conducted by Core Research, returned to a normal level of 81.9, close to the 25-year average level. It appeared that Ireland’s vaccination programme had defended against COVID-19 and as a result, concern about the pandemic began to decline. Last Christmas half the population (48%) remained concerned about COVID-19, but by St. Patrick’s Day, this had fallen to only 23%. Thanks to the vaccinations and the collective effort, the public were ready to embrace a new dawn and consumer confidence was at a healthy level.
However, on 22 February, Putin gave the order to invade Ukraine and as well as the tragic human cost and refugee crisis, the global energy system experienced a shock. The rate of inflation went from an already moderate level of 5% in January 2022 to 9.1% in July only to decline slightly to 8.7% most recently in August.
Behind all economics are emotions and human behaviour. How people are feeling about the world determines demand and expectations. Six months in to the cost of living crisis, it is a worthwhile exercise to compare the mood of the nation today to how the public responded six months into COVID-19.
Mood is Pessimistic and Anxious
September 2020 marked six months since COVID-19 started spreading in Ireland, and despite lockdowns, loneliness and deaths, there was a strong level of hope and optimism, that as a nation, we could overcome the crisis. 57% of adults were optimistic. This fuelled a sense of collective effort, a meitheal spirit and a resilience that guided us through the following 18 months.
In comparison, today, six months into the cost of living crisis only 20% of adults are optimistic that we can overcome. Instead, 80% of adults are pessimistic or unsure if we can get through these economic challenges. While the threats are somewhat different – there is a significant lack of hope within the population about the difficult period ahead.
Are Better Days Coming?
When Dermot Kennedy took to the main stage at Electric Picnic this summer, I was reminded of Leo Varadkar’s May 2020 speech when he paraphrased the songwriter with the reassurances that ‘some summer night, we will see our friends again.’ While these social moments have come true, they are proving to be more expensive for people to enjoy. Instead of reassuring families facing higher bills, Varadkar suggested this week that parents may have to start paying a ‘nominal fee’ for kids to get on school buses.
The Government responded with a suite of supports in the early months of COVID-19 and this was acknowledged by the public. Six months into the pandemic crisis, 57% of the public believed the Government was handling the situation well. In contrast, only 24% of the public believe the Government is handling the cost of living crisis.
Similarly only 8% of the public give energy providers a positive approval. In contrast to 72% of adults who gave the HSE a positive approval six months into the COVID-19 crisis. Energy providers are not alone, with other private companies receiving disapproval in terms of their response to this crisis.
Vacuum of Leadership and Hope
The public and customers are simply asking “what is the plan?” and “who will provide reassurance?” There is a vacuum of leadership, and an absence of hope. Compared to the days of COVID-19, there is little reassurance that while it will be a challenging winter, the nation will be resilient and supported.
However, the few companies and brands which communicate and demonstrate their understanding of the public’s mood and concerns are already experiencing stronger approval ratings than others. Customers are attracted to brands who are providing reassurance during this time. Notably, the grocery category is performing better than others at providing solutions to shoppers, and this is recognised by the customer.
One in five people tell us in our research they are not impacted by the cost of living. This group tends to be the higher income tier and those not renting. Many leaders in politics, business, and marketing will be protected by the high level of inflation and may never experience any concern. However, it will be important as we plan our years ahead to recognise that during a crisis, acknowledging the concerns, providing practical solutions and boosting confidence is good for the economy and society.