Shopper confidence falls with rising cost of living

Cash

Shopper confidence has declined to its lowest level in a year, new research shows.

The latest Shopper Confidence Index from IGD shows that concerns around food price inflation are at their highest since March 2013 and 85% of shoppers expect food prices to get more expensive next year.

The data shows that shopper confidence fell to -9 – from -4 in August – the largest recorded monthly decline. 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% of shoppers expecting to be worse off in the year ahead, a 9% increase on August’s figure. Confidence has declined across all shopper demographics, but more so among lower income households, the data shows.

Financial confidence across lower income households continues to decrease, with 42% expecting to be worse off in the year ahead, compared to 26% in August. Confidence among higher income households also decreased, with 30% expecting to be worse off in the year, compared to 22% in August.

The research shows that 21% of shoppers expect to focus more on saving money – a 6% increase on August’s figure.

The Shopper Confidence Index Shopper finds that confidence is declining across all regions, particularly in the Midlands where the score is 13 points lower than last month.

The figures reveal that 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.

Simon Wainwright, Director of Global Insight at IGD, said: “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.

“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.”