Shopper confidence is on the rise for the first time since April this year as shoppers gear up for Christmas – despite the mounting food prices.
People looking forward to celebrating the holidays with their loved ones again this year have driven an increase in shopper confidence throughout the month of November, ShopperVista’s shopper confidence index showed.
Shopper confidence had been in decline since earlier this year as the country battled labour shortages and the supply chain crisis.
But as the busy holiday period kicked off, shopper confidence rose to a high of -6 at the end of November, bringing the overall average to -9 (from -11 in October).
“Following the bleak picture the Shopper Confidence Index painted last month, it’s refreshing to see a slightly brighter outlook as we head into the festive period,” said ShopperVista head of insight Rhian Thomas.
“Assuming that no more restrictions are put in place as a result of the Omicron variant, we expect confidence to be elevated throughout the month.”
ShopperVista’s report showed 67% of people believe Christmas is a time to splash out on food and groceries.
However, it also noted that consumers are increasingly worried about food price inflation.
The latest Kantar data found that grocery inflation for the 12-week period to 28 November stood at 3.2%, the highest level since June last year.
But even though prices were up, grocery sales still fell by nearly 4% in the 12 weeks to 28 November (compared with the same period in 2020).
“Inflation is already nudging up the price of Christmas dinner staples,” said Kantar head of retail and consumer insight Fraser McKevitt. “The average cost of a meal for four is now £27.48 – that’s an increase of 3.4% compared with last year.
“Consumer behaviour hasn’t caught up with these changes though. Habits we’d expect to see shift, like swapping branded products for own label or seeking out promotions, haven’t altered just yet.”
ShopperVista’s Thomas added that customers would likely start focusing on saving money at the beginning of 2022 as they made up for overspending at Christmas.
“Shoppers remain highly sensitive to price rises and news of any shortages, which in turn impacts confidence. ‘Savvy shopping’ will become increasingly prevalent again in the new year and value will be top of mind,” he said.
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