Irish businesses are feeling the pressure of the cost of living crisis more than their counterparts in Europe a new survey has found.

Fintech company SumUp spoke to over 2282 people including 498 in France, 493 in Germany, 186 Great Britain, 540 in Italy, and 565 in Ireland to get their views on what were the greatest challenges facing their firms.

More than one in four, 26.5%, believed customer spending over the past Christmas had dropped as a direct consequence of the rising cost of living.

However, in Ireland, that figure rose to 27.1% which was higher than any of the other countries surveyed in Europe.

In Italy just 23.5% believe this to be the primary cause of lower business performance, in France that figure was 22.9% , the UK 21.8%, while in Germany the percentage drops to 17.3%. 

Almost one in five or 17.6% of business owners across Ireland also predicted that the search for discounts or special offers would increase.

While 10.8% of respondents stated that they felt that customers would halt their purchasing of certain products based on the price point.

Despite this overall negative outlook, some business owners remained optimistic about spending habits, with 11.1% believing that shoppers would be more willing to put their hands in their pockets over the holiday season. 

Irish respondents noted energy costs (16.9%), the cost of supplies (16.3%) and the decrease in customers’ purchase power (14.7%) as the leading causes of disruption in their business operations.

In response, almost one-third of Irish businesses (31.5%) have already implemented changes to tackle rising costs, with a further 23% considering doing so in the future. 

Almost a third, 28.8%, increased the prices of the products or services supplied, 18.1% replaced higher-quality products with cheaper alternatives to ease the cost, while 15% of business owners reduced their own salaries to help make ends meet.

Only 3.8% reduced workforce and 0.4% closed one or more stores/branches.

These figures are lower than other European countries as 9.8% of merchants in the UK reduced staff numbers, 9.2% in Germany, 7.1% in Italy, and 6.7% in France.

Just under one in four businesses (23%) looked to increase online visibility to attract new customers, the reinforcement of customer loyalty (19%), and to save time and increase productivity (18.9%).

The survey also found the main use of Generative AI was for content creation for businesses’ websites, social media and marketing (27.4%).

It was also used to better understand customers' expectations (17.3%) and the running of targeted marketing campaigns (14.4%). 

As for the future - almost half of all respondents (49.3%) stated they are confident that their business will improve over the course of 2025.

But SumUp suggested further adjustments will likely be necessary for businesses that have not already adapted.

Niall Mac an tSionnaigh, CEO of SumUp Limited commented: “We know that businesses are struggling with the rising cost of everyday life, but we also know that small merchants make up the fabric of many communities, offering goods and experiences that bigger enterprises cannot offer.

"While sentiment for 2025 looks to be on an upward trajectory, SumUp remains committed to empowering businesses across Ireland, offering them a suite of services to make running a business that much simpler in all times.”