Continued concerns about rising food inflation in the months ahead have contributed to a further fall in shopper confidence.
This is according to the latest Shopper Confidence Index from IGD. Its ShopperVista research found that 79% of consumers expect food prices to get more expensive next year, compared to 75% last month.
The August Index also reveals a widening of the K-shaped economic recovery with 28% of higher affluence groups expecting to be better off in the year ahead, compared to 23% in July. Meanwhile, lower affluence groups increasingly believe they will be worse off in the year ahead, with 26% believing this, compared to 23% in July.
The overall Shopper Confidence Index slipped back slightly to -4 in August, having declined for three of the last four months. However, it remains relatively high and is still at one of the highest levels in the last five years.
August saw dull weather and the further rise of the COVID-19 Delta variant. However, confidence was boosted by the reopening of much of the economy, more people taking holidays, and the late summer Bank Holiday.
“The continued rise in inflation concerns are likely to lead to a sudden return to risk-aversion and more value-seeking behaviour, particularly among families who are hard-pressed financially,” said Simon Wainwright, Director of Global Insight at IGD.
“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.”
NAM Implications:
- Heading to a two-tier food supply chain?
- One for affluent consumers…
- …and one for those that have to settle for less.
