Latest research by IGD for ShopperTrack has found that consumers are feeling much gloomier about their financial prospects than they did a year ago.
The results, published on Monday found that 61 per cent believe they will be worse off in the next 12 months. This is double the level in October 2010.
Some 61 per cent say they will be cutting down on eating out this year, although in general shoppers are not planning on cutting back spending on food shopping.
Joanne Denney-Finch, chief executive, IGD, said: “Shoppers are clearly feeling a lot more downbeat than they were last year and plan to do some major belt tightening. Shoppers of all ages and across all socio-economic groups are telling us they intend to cut back on non-essentials, such as going to the theatre or on holiday. Shoppers seem to be less keen to economise on their food and grocery shopping, with only around a third citing this as a category they intend to spend less on. But this figure could be even lower, as our research also reveals that 32 per cent of shoppers mistakenly believe that January’s VAT increase applies to all their food and grocery shopping.”
Michael Freedman, IGD senior consumer analyst, believes this could be an opportunity for the fresh produce trade. He said: “Some shoppers are confused about what products VAT is levied on. They think it applies to all food and therefore will need to economise on food shopping. Our research didn’t breakdown products into fresh fruit, vegetables and salads but there’s clearly an opportunity to educate shoppers that these products don’t have VAT applied to them.”
