Shopper confidence has declined to its lowest level in a year, according to the latest Shopper Confidence Index from IGD.
The September 2021 Shopper Confidence Index highlights that concerns around food price inflation are at their highest since March 2013 as 85 per cent of shoppers expect food prices to get more expensive next year (vs 79% in Aug 2021).
Following a small but consistent decline for the last four months, shopper confidence fell to -9 (vs -4 in August) which is its largest recorded monthly decline. IGD said confidence declined steadily throughout September and fell to -14 at the end of the month.
Overall financial confidence has also fallen sharply in the last month with 31 per cent of shoppers expecting to be worse off in the year ahead (a 9% increase vs Aug 21). Confidence has declined across all shopper demographics, but more so among lower income households.
Financial confidence across lower income households continues to decrease with 42 per cent expecting to be worse off in the year ahead compared to 26 per cent in August. Confidence amongst higher income households also decreased with 30 per cent expecting to be worse off in the year vs 22 per cent in the previous month.
One fifth (21%) of shoppers expect to focus more on saving money rather than quality next year (a 6% increase on August 2021).
Shopper confidence is declining across all regions, particularly in the Midlands where the score is 13 points lower than last month. Shoppers aged 35+ are becoming less confident than those aged 18-34. In the last month confidence has declined from 0 to -12 among 35-44 year olds.
“This month’s Shopper Confidence Index is a sobering read and we anticipate it will be a similar story next month, following the steady decline we’ve seen throughout September,” Simon Wainwright, director of global insight at IGD, said.
“Moving forward shopper focus will be on value for money and we will see much wider adoption of the 2021 ‘savvy shopping’ trend as shoppers look to save money, with many switching to private label products, motivated by seeking out savings. The discount channel is forecast to be the fastest-growing grocery channel over the next five years and we will see many shoppers shift their shopping behaviour to make cost-savings from this channel.
“Shopper confidence will remain very fragile for the foreseeable future so retailers and suppliers will need to focus on building loyalty by supporting their customers’ needs by offering value for money.”
Brian McLister