A new report from the Institute of Grocery Distribution (IGD) has outlined the industry’s challenges to growth and the problem of labour shortages.
In the new ‘Economics Viewpoint report: Striving for Growth‘, IGD stated: “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.”
IGD shopper data showed that families and individuals will continue to “shop cautiously” as factors such as debt and job insecurity affected 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, said IGD. However, household debt will reach record levels in 2026, according to recent findings from the Trades Union Congress.
IGD said that despite the labour market being more 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.
Labour shortages
In response to 2023’s Independent Review into Labour Shortages in the Food Supply Chain, IGD said it will support 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.
It highlighted that 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.
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.”
