According to the latest Shopper Confidence Index, focus on quality for the year ahead is at its highest level recorded, driven by higher earners who have the disposable income to “trade up”.
Shopper confidence remains at its highest level in over a year, driven by the easing of lockdown restrictions, the vaccination programme and a focus on Easter.
However, shopper sentiment is becoming increasingly polarised between income groups and an expected K-shaped recovery – characterised by a stark split in the recovery pace of the economy – will see some shoppers grow in prosperity, whilst others are left behind or stay the same.
March 2021 results
Shopper confidence remained stable at -4, which is the highest level since January 2020. This compares to a score of -9 this time last year, at the start of the pandemic.
During March, shopper confidence improved to -2 at the end of the month as the focus turned to family gatherings over Easter and restrictions began to ease.
IGD ShopperVista 2021
- Shopper focus on quality (18%) rather than saving money (14%) in the year ahead is at the highest level recorded*.
- Financial confidence remains relatively high. 22% expect to be better off in the year ahead and 26% expect to be worse off.
- Shopper confidence is becoming increasingly polarised by income group.
- More higher earners believe they will be better off (26%) than worse off (24%) in the year ahead. More lower income earners expect to be worse off (34%) than better off (14%).
- Confidence is rising in the Midlands and North England but declining in London and Scotland.
Simon Wainwright, director of global insight at IGD, said: “The focus on quality provides grocery retailers with an opportunity to encourage shoppers to trade up. This underlines the need to continue to invest in NPD and innovation to maintain and gain market share from the more affluent shopper.
“But, as we head into a K-shaped recovery, saving money remains a top priority for lower income households. Due to COVID-19, only 28% of lower-paid workers on furlough reported receiving their full wage compared to 52% of higher paid workers. With unemployment not set to peak until Q4 2021, before declining slowly, savvy shopping is likely to be a key behaviour for those shoppers most adversely affected, particularly those aged 18-24.”
The full IGD Shopper Confidence Index is available to subscribers on IGD ShopperVista.