Increased inflation is continuing to concern UK shoppers, with 79% expecting food prices to get more expensive next year, according to the latest Shopper Confidence Index report from IGD.
The August edition of the report also indicates that the K-shaped post-pandemic recovery is getting wider, with 28% of higher-affluence groups expecting to be better off in the year ahead (compared to 23% in July 2021).
In addition, 26% of respondents from lower affluence groups are expecting things to get worse in the year ahead (compared to 23% in July).
“The continued rise in inflation concerns are likely to lead to a sudden return to risk-aversion and more value-seeking behaviour, particularly among families who are hard-pressed financially," commented Simon Wainwright, director of global insight at IGD.
“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.
“On the reverse, more affluent shoppers will continue to trade up and focus on quality due to increased disposable income created by pent-up savings.”
The Index found that shopper confidence has fallen back to -4 in August, having declined for three of the past four months. However, it still remains at one of its highest levels over the past five years, IGD said.
Confidence among younger shoppers has increased for the first time since April 2021, the study found, with 37% of 18–44-year-olds expecting to be better off in the coming year.
In addition, overall financial confidence remains relatively high with 24% of respondents in August 2021 to be better off in the year ahead, up 3% on the previous month.