The latest IGD Shopper Confidence Index shows consumer confidence increased for the second month running, hitting -4, which is the highest level since February 2020.
The increase in confidence has been driven by the government’s plan to ease lockdown restrictions and the rapid rollout of the Covid-19 vaccination programme, the IGD said.
The highest increase in confidence was among consumers aged 35-44 and those with children, which is likely to be a result of schools returning on 8 March 2021, IGD added.
Financial confidence is also at its highest level in over a year and trust in the food industry to keep food prices low is at its highest level to date.
The research also reveals shoppers are less fearful of food prices rising – 76% expect food prices to be more expensive, down 4% on last month.
The study shows confidence among higher earners is increasing, while lower earners are becoming increasingly concerned that they will be worse off in the year ahead.
Simon Wainwright, director of global insight at IGD, said: “It’s really reassuring to see another slight increase in confidence, following the January score; it brings a sense of optimism. However, the landscape is likely to remain predominantly polarised. There’s elevated confidence among higher affluence groups, many of whom have built up savings during the pandemic. In contrast, confidence is likely to remain weaker among lower affluence groups due to lost incomes and negatively impacted employment prospects.
“That said, we could see confidence continue to rise in the short-term following the extended financial support announced in the Budget.”
He added: “As the world begins to reopen this year, grocery retailers will need to continue to invest in NPD and innovation to maintain market share from the more affluent shopper, but will also need to focus on delivering value for shoppers who find themselves in a fragile economic position.”