IGD: consumer confidence takes a dip due to growing concerns about rising inflation

Increasing concerns about rising inflation have contributed to a small dip in shopper confidence, according to the latest Shopper Confidence Index from IGD.

According to the June 2021 Shopper Confidence Index, from ShopperVista – which provides category, insight and commercial professionals with trusted shopper insights – 79% of shoppers expect food and grocery prices to increase in the year ahead and 14% expect them to rise significantly, up from 8% in April 2021. This follows acceleration of inflation in the UK and warnings from the Bank of England of further increases, despite low inflation for the food and grocery industry.

June 2021 results

Despite this rising concern, shopper confidence continues to remain relatively stable, dropping by just one point to -3, driven by the continued vaccine roll-out but balanced by the new Delta variant and the four-week delay to the lifting of restrictions, in addition to inflation concerns.

Financial confidence is at its highest level ever recorded at +4, which means that more people expect to be better off than worse off in the year ahead, but confidence continues to remain polarised. 

IGD ShopperVista 2021

Index highlights

  • Shopper confidence remains relatively strong at -3, decreasing by one point just two points from the five year high in April 2021
  • London showed the biggest decline in confidence, falling from +4 in May 2021 to -2 in June 2021
  • Shopper confidence declined towards the end of the month to -7 to coincide with the reported 26,000 new COVID-19 cases which was the highest level since January 2021
  • 21% of lower income households are concerned about rising food prices compared to 11% of higher income households
  • Focus on quality versus saving money remains high at +7, compared to 0 in June 2020

Simon Wainwright, director of global insight at IGD, said: “Whilst it remains quite strong, the last month shows us that shopper confidence is fragile due to the relative uncertainty we face as we begin to move forward from the pandemic.

“Concerns surrounding inflation are to be expected but it’s reassuring to see that the rise in COVID-19 cases and delayed lifting of restrictions hasn’t significantly impacted confidence levels, perhaps indicating that the UK population is ready to move forward into the post-pandemic world.

“As the economy sets up to open further, the key focus for food and grocery retailers and suppliers will be on retaining shopper spend. Our IGD annual market forecasts show that the growth of retail food and grocery will slow from 8.5% in 2020 to 1.7% in 2021, as shoppers economise, the eating out industry reclaims sales and there is more spend and opportunity available for leisure activities. 

“Focusing on quality and meeting the needs of shoppers who are economising are both key priorities, as is helping shoppers make the most of their shopping experience. Supermarkets and hypermarkets in particular, will be focusing on new features to reposition as retail destinations, not only to retain business but to counter the continued growth of online, which now includes the new quick commerce channel.”