The essential partner to a thriving food and consumer goods industry, IGD, has released a new Economics Viewpoint report: Striving for Growth, outlining the industry’s challenges to growth, and the urgent talent shortage.
Although both food inflation and all items inflation are fading, UK food businesses will contend with the challenge of maintaining low prices while urgently driving volume growth.
The report states: ‘Falling inflation creates a risk to businesses without price change. Added to this, is a profound shortage of digital, technical and engineering skills fuelling the sector, compelling businesses and government to work together in raising the appeal of careers in food.’
Meanwhile, IGD’s latest Shopper data shows that families and individuals will continue to shop cautiously as factors such as debt and job insecurity affect spending habits in a time of slow growth.
James Walton, chief economist at IGD said: ‘Although real-term wage growth is on an upward trajectory, partly due to the rise in the Minimum and Living Wage, the burden on household budgets is still considerable and this is likely to drive more selective shopping choices, and greater competition among retailers.’
According to the Office for Budget Responsibility, average earnings growth will fall from a record 7% in 2023 to 3.6% in 2024. This will exceed inflation, so real earnings growth will continue. However, household debt will reach record levels in 2026, according to recent findings from the Trades Union Congress.
The landscape of job security is becoming more fragile, as redundancies are on the rise and the number of vacancies is falling. Within this picture, the report reveals that 36% of all adults plan to cut spend on food and grocery shopping over the next few months. The report also shows that 43% of adults plan to buy fewer items in their regular food shop over the next few months.
Despite the labour market being competitive in some sectors, the report acknowledges an urgent talent and skills shortage within the UK food and consumer goods sector. Within UK food and grocery, vacancies are markedly high, with an estimated 108k in food service currently.
In response to 2023’s Independent Review into Labour Shortages in the Food Supply Chain, IGD is supporting the Food and Drink Sector Council in leading a Workforce Steering Group to address the talent shortage and raise appeal for the spectrum of careers in UK food and grocery.
Part of this work will be a sector-wide campaign, rolled out this summer, mobilising food businesses, government, and the careers and employment sector to champion the breadth and depth of opportunities for all across the industry. This new Economics Viewpoint unpacks the need for food and consumer goods businesses to get ahead of the skills challenge and feed the talent pipeline for improved growth.
Naomi Kissman, Director of Social impact for IGD, said: “The food industry powers the everyday economy, employing one in eight people in the UK. A thriving food system relies on maintaining a skilled workforce. We have a long heritage of working with businesses and developing talent within the industry, as well as supporting young people to prepare for work. We’re delighted to be working more broadly with partners across the food system, and with government, to showcase the breadth and depth of opportunities it has to offer.”
