Talking Retail Grocery and product news for independent retailers
The IGD’s August shopper confidence index found 79% of shoppers expect food prices to rise next year, compared with 75% at the same time last year.
The index also revealed a widening of the ‘K-shaped’ economic recovery (where different parts of the economy recover at different rates) with 28% of more-affluent groups expecting to be better off in the year ahead, compared with 23% in July.
Meanwhile poorer people increasingly believe they will be worse off in the year ahead, with 26% believing this, against 23% in July.
Other notable findings included:
- Confidence among younger shoppers has increased for the first time since April, with 37% of 18- to 44-year-olds expecting to be better off in the coming year
- Overall financial confidence remains relatively high, with 24% of consumers expecting to be better off in the year ahead, up by 3% compared with July
- Shopper confidence is declining in Scotland, registering -7 on the index compared with -2 in July, amid growing Covid cases and warnings that restrictions may have to be re-imposed.
Simon Wainwright, director of global insight at the IGD, said: “The continued rise in inflation concerns is likely to lead to a sudden return to risk-aversion and more value-seeking behaviour, particularly among families who are hard-pressed financially.
“Retailers will need to pay close attention to the widening K-shaped recovery; lower-affluent families will increasingly seek out value, so special offers, everyday low prices and visits to discount stores will become prominent.
“On the reverse, more-affluent shoppers will continue to trade up and focus on quality due to increased disposable income created by pent-up savings.”
