Shopper confidence is at its highest level in over a year, according to the latest IGD Shopper Confidence Index.
The boost has been driven by the announcement of the planned easing of lockdown restrictions and the rapid rollout of the COVID-19 vaccination programme. Financial confidence is also at its highest level in over a year and trust in the food industry to keep food prices low is at its highest level to date.
However, despite the more upbeat results, IGD highlighted that financial confidence is increasingly polarised between income groups. Whilst confidence among higher earners is rising, lower earners are becoming increasingly concerned that they will be worse off in the year ahead.
Looking at the Index for February, the score increased for the second month running to -4, which is the highest level since February 2020.
Confidence dipped to -9 at the beginning of the month, coinciding with lockdown restrictions and cold weather, but then increased to -2 when the Prime Minister announced the four-step plan for ending restrictions in England.
The highest increase in confidence was amongst shoppers aged 35-44 and those with children, which is likely to be a result of schools returning.
Simon Wainwright, Director of Global Insight at IGD, said: “It’s really reassuring to see another slight increase in confidence, following the January score; it brings a sense of optimism.
“However, the landscape is likely to remain predominantly polarised. There’s elevated confidence among higher affluence groups, many of whom have built up savings during the pandemic. In contrast, confidence is likely to remain weaker among lower affluence groups due to lost incomes and negatively impacted employment prospects.
“That said, we could see confidence continue to rise in the short-term following the extended financial support announced in the Budget.
“As the world begins to reopen this year, grocery retailers will need to continue to invest in NPD and innovation to maintain market share from the more affluent shopper, but will also need to focus on delivering value for shoppers who find themselves in a fragile economic position.”
NAM Implications:
- Polarisation of confidence has to result in more willingness vs ability issues in terms of buying.
- i.e. increasing levels of frustration amongst the less affluent…
- Some post-Lockdown work required in terms of increasing demand…
