International food and grocery companies are bracing themselves for higher input costs in 2011 but remain optimistic about the future, according to exclusive research from IGD.

Its International Grocery Retailing Survey, of more than 100 different retailers and suppliers, revealed 82% were confident about their future prospects and more than half (53%) expected the global grocery retail industry to outperform the wider economy over the next five years. Twenty-nine per cent expected to perform on a par with other industries.

Eighty per cent of companies surveyed had upped investment in new product development or kept it at similar levels over the past 18 months, despite the tough economic backdrop.

However, 75% predicted a hike in the price of ingredients over the coming year, 68% expected an increase in energy prices and 57% predicted that labour costs would stay the same or ­decrease.

IGD chief executive Joanne Denney-Finch said food and grocery companies were aware of cost pressures coming their way but were continually reassessing operations to ensure maximum efficiency and to cushion shoppers from the increases.