The Institute of Grocery Distribution (IGD)’s latest ShopperVista data has shown over a third (34%) of shoppers are expecting to be worse off in a years’ time, with food prices (94%) and energy bills (86%) their main worries.
Food price concerns are at the highest level for three years, with more shoppers worried about food prices now than during the height of the cost of living challenges three years ago (94% last month compared to 91% in January 2023).
IGD also suggested that with prices rising beyond just food and grocery, shoppers will have to closely monitor their outgoings across the board, which could mean a “drop off in discretionary spending across food and grocery.”
Recent volatility in the Middle East has intensified pressure on global supply chains, driving spikes in oil prices which is impacting the cost of fuel, energy and food inflation.
Although signs of the conflict easing provided a modest lift to overall sentiment in April, shopper confidence remained negative, at a figure of -1, but this is not felt evenly across the income groups.
Bryony Perkins, senior insight analyst at IGD, said: “Shoppers are likely to remain cautious in the months ahead, delaying discretionary spend until the geopolitical outlook becomes clearer. Heightened sensitivity to price increases will continue to shape purchasing decisions and prompt down trading and value-seeking behaviour.”
Some of the biggest shifts year-on-year came from shoppers focusing on increasing fibre (12%) and eating more natural, healthy foods (15%). As a fifth of shoppers avoid foods they deem to be unhealthy (up 4% year-on-year), innovation for manufacturers and retailers should focus on areas shoppers are prioritising, to win over those who are trying to eat healthier, the IGD advised.
In fact, more shoppers this year are claiming to rarely eat anything unhealthy, reflecting the rise in clean eating and the overall movement towards healthier diets. This is also likely to be an indirect benefit to shoppers’ budgets as they cut back on discretionary spending - including treats.
Importantly, however, there is often a gap between what people say and do and shoppers are likely to still buy treats on impulse in certain scenarios, the IGD concluded.
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