The UK economy is currently seeing slow productivity growth, which is creating problems for both businesses and government and could threaten national prosperity.

IGD’s latest Viewpoint report: Three productivity gaps for UK food and drink reveals a number of productivity ‘gaps’ facing the supply chain. The report also discusses how these challenges might be addressed, what the commercial benefits would be, how to make the supply chain work better and the benefits to consumers.

James Walton, Chief Economist at IGD, says: “This is not a new problem; productivity gains in the UK have been slow since the 2008-09 recession. However, other economies in Western Europe, which were also hit hard, have restored productivity growth, moving faster than the UK. This productivity gap suggests the UK faces particular challenges.

“Compared to other developed food and drink markets in Western Europe, labour productivity in the UK supply chain is unremarkable. Food and drink supply chains in peer countries have seen better labour productivity gains over the last decade, leaving the UK behind. This has created a second productivity ‘gap’ and if nothing is done, the UK supply chain may continue to lose ground.”

Productivity growth in the UK food and drink supply chain is lowest in retail and eating out. Resolving this third gap could allow the supply chain to deliver better value to consumers; especially vital in the current cost-of-living crisis.

James Walton continues: “Our latest Viewpoint report highlights the different productivity issues at each point in the food and drink supply chain, showing the complexities of the problems - it is not a single issue with a single solution.

“Improved productivity in the UK food and drink supply chain is needed to address several of these business concerns. If this was achieved, consumers could benefit by seeing increased food security, because the UK would be less reliant on imports, and lower food prices by removing unnecessary business costs. The food and consumer goods industry would also be less vulnerable to labour challenges.”

IGD works with stakeholders throughout the supply chain to drive change. There are several activities which contribute to improving productivity, including: food waste reduction, free learning for the food and consumer goods industry, moving towards circular economies and the drive towards Net Zero.  

IGD’s latest Viewpoint report is free to download at: https://bit.ly/3rxzCRt

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For media enquiries, or to arrange an interview with our Chief Economist, please contact Sarah Burns [email protected] / t: 07483 094027

Notes to editors:

1. All content is owned by IGD. If you use or refer to any content in this press release, please credit IGD
2. Follow us on Twitter: @fromIGD and LinkedIn: https://www.linkedin.com/company/igd/
3. IGD is an organisation of two interconnected communities. The profits from Commercial Insight are reinvested into Social Impact, which together work to drive change that makes a tangible difference for society, business and the individual.
4. Social Impact from IGD is delivered in four key areas:
   • People – focussed on giving young people opportunities to develop their employability and life skills, and on building the knowledge and capability of food and consumer goods industry colleagues, to foster an inclusive and productive workforce;
   • Health – nutrition experts use the latest research and behavioural science to develop practical tools that help the whole industry. IGD is collaborating with and inspiring companies to adopt best practice and implement change;
   • Sustainability – focused on mobilising the industry to tackle climate change, reduce food waste, increase food surplus redistribution, develop sustainable packaging systems and accelerate the industry’s progress towards Net Zero;
   • Economics – supporting better strategic planning and decision making, for the benefit of consumers, through economic analysis and engagement with policy makers.