As the economy recovers, what new challenges are emerging?

Date : 27 July 2021

With vaccinations being rolled out rapidly and restrictions lifted, shopper confidence remains relatively high. This is driving economic recovery, but experiences continue to vary and evidence of a “K-shaped” recovery persists, according to IGD.

In the second issue of its quarterly ‘Viewpoint’ report, the economics team at IGD focus on the challenges emerging for the food and consumer goods industry as the economy continues to recover.

The latest research has highlighted three key themes:

1. Significant risks to the recovery remain

Businesses need to remain alert and agile as a number of factors could mean bumps in the road to recovery:

  • Possibility of further setbacks relating to COVID-19 due to the emergence of new viral variants
  • Labour shortages are likely to continue and to create operational difficulties
  • Other inflation pressures are also mounting
  • UK transition out of the EU is ongoing – expect friction in UK / EU and GB / NI goods movement

2. The shopper landscape provides opportunities but also challenges

Business will need to adapt to a shopper landscape that has been changed significantly, perhaps permanently, by COVID-19:

  • A hybrid working-from-home / from-the-office model seems likely in the short term, creating operational issues (and opportunities) for retailers and suppliers
  • Further recovery of foodservice and hospitality may act as a brake on growth for retailers in the short term, but will open up new routes to market for suppliers
  • Shopper spending priorities are changing as new options become available, challenging spend on food and consumer goods

3. Government priorities are shifting

Government priorities are shifting as longer-term issues return to focus. Improving environmental and health outcomes will be major themes, with far-reaching implications for the food and consumer goods industry.

Business have made good progress on improving both health and environmental practices. However, it is important to recognise that there is more to be done. A clear direction of policy by government will help businesses to remain on track, but there are also opportunities to demonstrate leadership and shape the future policy agenda.

Naomi Kissman, Strategy and Corporate Affairs Director at IGD, said: “Shopper confidence in the UK is relatively strong, driving economic recovery. Rapid spread of the Delta variant and delaying the easing of restrictions is not thought to have presented significant new economic risk, but COVID-19 remains a major uncertainty.

“Other challenges lie ahead as the UK navigates a tightening labour market and implementation of new border measures for goods imported from the EU.

“With so many downside risks in play, including COVID-19, businesses should not expect a smooth, straight recovery. There are likely to be many bumps on the way, especially if new viral variants continue to appear. Long-term planning will be difficult for a while, so businesses will need to stay agile.”

IGD’s second edition of its quarterly Viewpoint report is free to download at:

IGD’s experts will be holding a free webinar on Thursday 29th July to delve deeper into their insight and analysis to help businesses build a fuller picture of what the future might hold. Sign up here


For media enquiries please contact Laura John on [email protected] or 07453 018 505.

Notes to editors:

  1. 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.

    Social Impact from IGD is delivered in four key areas:
    1. 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;
    2. 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;
    3. 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;
    4. Economics – supporting better strategic planning and decision making, for the benefit of consumers, through economic analysis and engagement with policy makers.
    Commercial Insight is delivered through six core areas:
    1. Retail Analysis – providing trusted data and insight, straight from the heart of retail;
    2. ShopperVista – providing insight that creates the foundation for progressive shopper and category thinking;
    3. Events – providing compelling experiences that connect people and ideas together;
    4. MarketTrack – the most trusted, rigorous market read in the retail sector;
    5. Supply Chain Analysis – providing answers and unlocking potential;
    6. Solutions – personalised solutions that address the critical customer and commercial challenges.
  2. IGD tracks and monitors multiple sources of information. Combined with our knowledge of the food and consumer goods industry, and rich shopper insights, this shapes our ‘Viewpoint’ – shared in a series of quarterly reports
  3. All content is owned by IGD. If you use or refer to any content in this press release, please credit IGD
  4. Follow us on Twitter: @fromIGD