March confidence falls 5-points as the Middle East conflict damages outlook

Since last month, there has been a 12% increase in shoppers expecting food prices to get more expensive in the year ahead. This is the sharpest rise since the cost-of-living crisis in 2023.

Shoppers recognise this situation. March’s confidence dip mirrors the reaction seen in 2022 when the Ukraine war began. While we don’t expect the impact to be as severe, shoppers are likely to remain cautious until they understand the longer‑term implications.

Bryony Perkins, Senior Insight Analyst

What has fuelled the rapid downturn in confidence?

Middle East conflict

The conflict that arose in early March is the main cause of the sharp decline in confidence this month. News of impacts on energy prices and consequently food prices will have given shoppers a reminder of the Ukraine War and will likely trigger them into retreating to the savvy-shopping tactics seen during that time.

Food price expectation

Shoppers have quickly linked the Middle East conflict to future shelf‑price increases, drawing on their experience from 2022. IGD’s Economics team suggest that in the worst‑case scenario, food price inflation could reach 8%.

What could happen next?

Shoppers will remain cautious until the longer‑term geopolitical impacts become clearer. April’s minimum wage rise will help some, but not enough to ease concerns about rising costs. We expect shoppers to further intensify their money‑saving tactics as a way to balance the rise of fuel, food and energy costs all rising simultaneously.

Even a short-lived energy shock could lift 2026 food inflation and delay volume recovery. Consumers remain highly price sensitive, leaving little tolerance for renewed volatility. Businesses should stress-test plans for short, sharp cost shocks.

Michael Freedman, Head of Economic and Consumer Insight

How bad could it get?

In 2022, following the outbreak of the Ukraine war, trust in the industry to keep food prices low fell to as low as 24% with murmurs over profiteering. Trust currently stands at double the 2022 figure at 48% but this fell in March as low as 37% as the conflict ramped up. Communicating the price of food will be essential to keep fragile trust measures intact.

Widespread price rises are expected over the coming months. From household energy to interest rates and inflation, the extent to which costs will go up will be determined by how long and how extreme the Middle East conflict is.

To stay close to what the ongoing conflict means for both the industry and for shoppers, visit our Economics page.

For more detail on how different shoppers are reacting to the conflict ShopperVista subscribers can read our latest monthly headlines. Key metrics in the report include:

• Demographic breakdown of confidence including age, income bracket and region

• Financial confidence in the year ahead, including demographic breakdown

• How shoppers are planning on changing their behaviour in the coming months

• How trust in the industry is changing in reaction to the external environment

• What are the key differences we are seeing and why these are important for your business

If you have any questions, reach out to [email protected]