Fears about rising inflation in the country is denting shopper confidence, a report by an industry think-tank said on Monday (6), suggesting store owners should expect more “value-seeking behaviour”, particularly among families who are hard-pressed financially.
As per IGD’s August shopper confidence index, about 79 per cent of shoppers expect food prices to rise next year, compared with 75 per cent at the same time last year.
The report also mentions that poorer people increasingly believe they will be worse off in the year ahead, with 26 per cent believing this as compared to 23 per cent in July.
Shopper confidence seems to be on a declining in Scotland, registering -7 on the index compared with -2 in July, as per the report, amid growing Covid cases and warnings that restrictions may have to be re-imposed.
The index also revealed a widening of the ‘K-shaped’ economic recovery- where different parts of the economy recover at different rates- with 28 per cent of more-affluent groups expecting to be better off in the year ahead, compared with 23 per cent in July.
Simon Wainwright, director of global insight at the IGD, said that the continued rise in inflation concerns is likely to lead to “a sudden return to risk-aversion and more value-seeking behaviour, particularly among families who are hard-pressed financially”.
“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," Wainwright said, adding that "more-affluent shoppers will continue to trade up and focus on quality due to increased disposable income created by pent-up savings.”
However, confidence among younger shoppers has increased for the first time since April, with 37 per cent of 18- to 44-year-olds expecting to be better off in the coming year, as per the report.
