Shoppers plan to cut spending on food in year ahead

A far-reaching survey into likely consumer trends for the year point to a gloomy picture for the country’s retail sector, with a large proportion of shoppers wrongly believing that the recent VAT increases will apply to all foods.

Three out of every five people expect to worse off financially this year, more than double that seen in a similar poll last year, with increasing numbers of people expecting their financial pressures to increase as the country’s austerity measures begin to take hold.

The figures come from the Institute of Grocery Distribution’s ShopperTrack research and also showed just one person in 10 expects to be better off this year, with shopping one of the ways in which consumers expect to make savings.

Responding to more pressures on their income, such as higher petrol prices, 61 per cent of shoppers say they plan to cut down on eating or drinking out in the year ahead with a further 58 per cent saying they intend to spend less on clothes.

Prospects for food shopping seemed to fair slightly better but still 32 per cent of people said they intended to spend less money on their groceries than last year.

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.”

Figures also showed that nearly half of people expected to spend less on going to the cinema, theatre or concerts during the year while 43 per cent said they would be economising on holidays this year.

Around a third of people also expect to save less with a similar number expecting to reduce or cut any charitable donations they make.

Home entertainment and home improvements were also areas which were likely to see reduced spending.

The increasing cost of foods may have played a factor in their decisions, with statistics this week from the United Nations’ Food and Agriculture Organisation showed that prices had risen to their highest level on record.