Bulletin: Budget pain and availability boost
29 August 2024Featuring volume recovery, spending, the budget, taxes, 'Mmmake Your Mark' campaign and availability.
Volume recovery?
The latest ONS data shows that household spending on food and drink rose very slightly between 2021-22 and 2022-23, but this was driven by powerful inflation. In real terms, with inflation accounted for, spending actually fell, across all household income groups. Households with the highest incomes cut back most aggressively.
Volumes are now recovering, although only very slowly. There is, however, still some way to go before market demand recovers to pre-Covid levels.
Read our latest article to find out more.
IGD opinion
Volumes are starting to pick up again but are still below the pre-COVID level. We can envisage a return to pre-COVID levels of household demand, but growth beyond that point will depend on the ability of the government to deliver sustained improvement in household prosperity.
Budget pain
The Prime Minister has warned that the October budget is “going to be painful”. “Those with the broadest shoulders should bear the heavier burden.” This is as a result of discovering a “£22 billion black hole in the public finances.”
IGD opinion
The Labour manifesto ruled out increases to National Insurance (NI), Income Tax rates or VAT. To plug the “black hole”, it is likely that there will be both spending cuts and increased taxes. The government has not ruled out increases to Capital Gains Tax or Inheritance tax. However, as NI, Income Tax and VAT make up the bulk of government income, it will be a challenge for the government to avoid increasing these tax rates or adjusting the thresholds in these areas.
Campaign launch
The Mmmake Your Mark campaign launched this week. The campaign unites the UK's food and drink industry to showcase why it’s such a vibrant place to work. Inspire others by getting involved. Share your story on LinkedIn, use the Mmmake Your Mark graphic and join the conversation.
Download the toolkit to take part in the campaign and watch the campaign video.
Availability boost
Our latest consumer research reveals that just 44% of adults aged 18+ reported poorer availability of some food and groceries in-store or online recently. This compares with a high of 77% reporting poorer availability a year ago.