Shopper confidence in the UK remains at its highest level in over a year, driven by the easing of lockdown restrictions, the vaccination programme and a focus on Easter, revealed the index, which began in 2013.
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.
“At an overall level, shopper confidence is likely to be boosted in the short term as non-essential shops and outdoor hospitality are set to open from 12 April and more people receive the vaccine,” the report said.
“However, confidence is likely to remain polarised, with confidence elevated among higher affluence groups and those who have built up savings. In contrast, confidence is likely to remain fragile among lower affluence groups and those whose incomes and employment prospects have been negatively impacted by the pandemic.”
IGD’s chief economist, James Walton, recently told FoodNavigator that consumers had learned better cooking skills in their own kitchens and saved money cooking at home during lockdowns; facts that would present a challenge to the hospitality industry. “Retailers will be trying to keep [consumers] cooking at home with new meal solutions,” he told us. “Restaurants must make the extra cost of eating out worthwhile, so experience is even more important than ever.”
March 2021 results
Shopper confidence remained stable at -4, which is the highest level since January 2020, according to the Shopper Confidence Index. 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.
- 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.”