UK food manufacturers are responding to shipping delays and rising demand for goods by tactically building stock levels as they approach the final quarter of the year.
New figures show that small and mid-sized firms generated £500,373 in sales in Q2 2025 – a 40.44% jump on the same period last year and 60.39% on the previous quarter
At the same time, lead days rose from 12 to 26 days QoQ and the number of purchase orders (POs) jumped by 46.96% YoY, and more than doubled QoQ, from 12 to 26.
The figures appear in the latest manufacturing report from inventory management specialist Unleashed. Unleashed is an inventory management software platform popular with small and mid-sized food manufacturers. Its quarterly report is based on data from more than 600 UK firms using the software, across manufacturing categories such as food and beverage, clothing and fashion, and construction.
The report shows that food manufacturers are now building stock levels in a bid to maintain product availability and service levels in the face of longer lead times – which increased by 14 days from Q1 to Q2.
The surge in purchasing corresponded with an increase in the value of excess stock, which nearly tripled QoQ from £24,282 to £70,360.
Profitability – measured as Gross Margin Percentage (excluding wages) – also dropped by 5.6 percentage points QoQ although firms saw a modest 2.7pp YoY uptick.
Joe Llewellyn, GM of ERP Small Business at The Access Group, the parent company of Unleashed, said the move towards ‘cautious buffering’ should help firms weather any further supply challenges over the coming months.
“The rise in POs and stock levels marks a tactical pivot for food manufacturers, with cautious buffering designed to mitigate the risk of delays and stockouts.
“In many cases, this isn’t a knee-jerk reaction to market conditions but a measured response. As manufacturers become more data driven, they’re able to improve their forecasting capabilities and reduce the risks associated with stock purchasing decisions.
“Looking ahead, there are promising signs that manufacturers will end 2025 in a good position. Sales are healthy, while separate figures show that business confidence has risen steadily every quarter this year. The Bank of England has also cut interest rates from 4.25% to 4%, while inflation is expected to fall below the 2% target. Taken together, this could contribute to margin recovery and selective growth.”
This pattern was mirrored across all manufacturing sectors, with average sales reaching £365,565 in Q2 2025 – a 47% jump on the same period last year and a rise of 1.9% QoQ. Like the food industry, there was also a rise in POs, excess stock value and lead times QoQ.
Food saw the biggest jump in sales revenue at 60% QoQ, while beverages saw the sharpest rise in POs at 250%. Lead times jumped most dramatically in sports and recreation (175%), while the value of excess stock grew fastest in electronics and telecommunications – more than tripling from £24,743 to £94,034.
