Optimism is rife in the grocery trade despite rising costs and tough competition.

More than four-fifths (82 per cent) of international food and grocery companies are confident about their future prospects, with many certain that innovations and internal efficiencies will help ensure the growth of the sector.

More than half (53 per cent) think the global grocery retail industry will outperform the rest of the economy over the next five years, while 29 per cent believe they will have a similar performance relative to other industries.

The findings were revealed in market researcher IGD’s International Grocery Retailing Survey, which also showed that 80 per cent of companies surveyed had increased investment in new product development or maintained it at consistent levels over the last 18 months.

However, looking ahead, 68 per cent of participating businesses believed that energy costs will rise during the course of 2011, while 75 per cent predicted that the price of ingredients would increase.

IGD chief executive Joanne Denney-Finch said: “Although global economic conditions are tough, food and grocery companies are more resilient. Our survey shows they are confident about their prospects compared to other industries.

“This confidence is based on a drive to innovate and to build on value for money as customers feel the pinch from increases in the cost of living, such as higher petrol prices.”

Denney-Finch added that although food and grocery companies viewed themselves as facing rising cost pressures, an emphasis on efficiency “should help cushion shoppers” from the impact of such price increases.

IGD said that 252 people working within the sector from over 40 countries responded to the survey.