The latest Shopper Confidence Index from IGD suggests that consumer confidence remains strong, with financial confidence reaching a new high.
The index decreased in May by just one point to -2 from the five year high of -1 in April, driven by the further easing of restrictions, the continued rollout of the vaccination programme, and record temperatures over the second bank holiday weekend.
One of the main drivers of this overall positivity was shopper confidence about their individual financial positions; just 19% expect to be worse off in the year ahead, which is the lowest level recorded since it was first measured by IGD in 2013.
However, this confidence continues to remain polarised across income groups. Higher-income households believe they will be better off (25%) rather than worse off (17%). In contrast, lower-income households believe they will be worse off (23%) than better off (20%).
Meanwhile, despite dropping from +9% to +5%, the focus on quality remains high, compared to -2 in May 2020.
Simon Wainwright, Director of Global Insight at IGD, said: “The continuation of boosted shopper confidence offers a reassuring outlook for retailers, suppliers and operators. Overall, shopper confidence is likely to remain positive over the summer as the economy opens up further, more people receive the vaccine and the threat of COVID-19 recedes.
“This elevated confidence creates an opportunity for retailers to focus on engagement with customers to drive additional and unplanned purchases. That said, saving money will continue to remain a priority for some shoppers, so it’s important to explore value strategies to meet the needs and motivations of different shoppers. Now is a good time to build on foundations to create long term trust and loyalty.”
He added: “Whilst confidence is still fragile, the polarisation between income groups has reduced slightly this month, further supporting the indicated positive outlook. However, it’s important to be mindful that things could change quickly. Shoppers are highly aware of the changing situation and bad news could cause a reversal in confidence. Factors such as inflation will also begin to impact shopper budgets and consequent behaviours.”
NAM Implications:
- Opportunities for all stakeholders to secure and maintain consumer support…
- …by delivering more than it says on the tin, always?
