Volume challenge
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 that “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.”
Download the Viewpoint report and 1-page executive summary.
Deposit return scheme delay
The UK, Welsh and Scottish governments and DAERA in Northern Ireland have agreed to a revised timeline to launch DRS in October 2027.
Previously, The UK government had announced it would launch DRS in October 2025. The new announcement states that the delay is “to ensure maximum alignment and interoperability of DRS across the UK, whilst still respecting the devolved nature of these policies.”
IGD Viewpoint:
The decision to delay the DRS scheme from October 2025 to 2027 provides time for businesses to prepare and understand the impacts of the implementation of Extended Producer Responsibility and Simpler Recycling.
Whilst it is positive news that all devolved administrations are working together, it remains disappointing that there is still not a consistent approach to materials taken across the devolved nations, with Wales looking to include glass in scope with other nations undecided.
Debt issue
The ONS has issued new data on public sector finances. There is some modestly good news to be found – government borrowing has fallen slightly, year on year.
However, borrowing of £120.7bn is £6.6bn higher than predicted by OBR in its most recent report, despite a growing tax burden.
Overall debt is still very high at about 98% of GDP, the highest since the 1960s.
IGD Viewpoint:
High levels of government debt mean that the burden of paying both interest and capital will likely grow in the future. This means that over time, more and more tax revenue will be used for repayment with less available for tax cuts, public sector spending or investment.
Current financial plans also rely on the willingness of lenders to go on providing money at rates that are manageable – goodwill is not guaranteed.
The mathematics of debt will leave political parties with little room to manoeuvre as they prepare manifestos for the upcoming election.
The key issue may be the ability to achieve good value and maximum public benefit from the available funds, rather than spending levels.
Availability boost
Our latest consumer research reveals that just 45% of respondents reported poorer availability of some food and groceries in-store or online recently. This is the lowest level recorded since first measured in 2021 and compares with a high of 77% reporting poorer availability a year ago.
Read our availability article for more details.