UK Shopper Confidence Strong, Financial Confidence Hits New Highs
Shopper confidence in the UK remains strong and financial confidence has reached new highs, according to the latest Shopper Confidence Index from IGD.
Financial confidence reached +3 in May of this year, which is the first time since 2013 that people expect to be better off than worse off in the year ahead.
Only 19% expect to be worse off in the year ahead compared to 23% in April 2021, IGD noted.
'Boosted Shopper Confidence'
Simon Wainwright, director of Global Insight at IGD, said, "The continuation of boosted shopper confidence offers a reassuring outlook for retailers, suppliers and operators.
"Overall, shopper confidence is likely to remain positive over the summer as the economy opens up further, more people receive the vaccine, and the threat of COVID-19 recedes."
The study also revealed that 25% of higher-income households believed they would be better off, while 17% believed they would be worse off.
Among lower-income households, 23% said they believe to be worse off, while 20% said they would be better off.
Younger and older shoppers were less concerned about their financial future, with only 13% of 18-24 year-olds and 16% of over 65 year-olds pessimistic about the future, IGD added.
'Opportunity For Retailers'
Wainwright commented, "This elevated confidence creates an opportunity for retailers to focus on engagement with customers to drive additional and unplanned purchases.
"That said, saving money will continue to remain a priority for some shoppers, so it's important to explore value strategies to meet the needs and motivations of different shoppers. Now is a good time to build on foundations to create long-term trust and loyalty."
In May 2021, shopper confidence decreased by just one point to -2, from the five-year high of -1 in April of this year.
It was driven by the easing of restrictions, the continued rollout of the vaccination programme and record temperatures over the second bank holiday weekend.
London and the South were the only two regions that witnessed improved shopper confidence, while Scotland and the North saw the greatest decline.
Elsewhere, the focus on quality dropped from +9% to +5% month-on-month, which is still high compared to -2 in May 2020.
Wainwright added, "The polarisation between income groups has reduced slightly this month, further supporting the indicated positive outlook. However, it's important to be mindful that things could change quickly.
"Shoppers are highly aware of the changing situation, and bad news could cause a reversal in confidence. Factors such as inflation will also begin to impact shopper budgets and consequent behaviour."