Bulletin: Tough 2026 ahead for food industry

Food industry faces a tough 2026 

IGD forecasts a challenging year ahead as rising costs, persistent food inflation and tax changes weigh on the UK food system.  

Despite some relief from slowing inflation, businesses must prepare for continued pressure on margins and consumer spending.  

Download our latest Free Viewpoint report: What to plan for in 2026? 

IGD opinion 

2026 will be a critical year for the food and drink industry. Businesses must stay relevant to value-conscious consumers while unlocking growth from resilient segments. Those able to deliver affordability alongside moments of indulgence will be best placed to succeed.” 

By the end of 2026, the UK will be halfway through the current Parliament, Donald Trump will be halfway through his second term, and devolved governments could look very different. Expect the Government to accelerate policies and regulatory changes shaping food policy, which are forces businesses cannot ignore. Next year is likely to bring a push to implement key measures before the next General Election, with food policy influenced by both government priorities and external pressures. 

Growth declines 

The UK economy contracted by 0.1% in October, marking the second consecutive monthly decline. Economists had expected growth, but persistent uncertainty and muted consumer spending continue to weigh on performance. 

IGD opinion 

Expect growth, globally and in the UK, to remain sluggish in 2026. This shows weakness in household demand, particularly in the run up to the Budget. It suggests that Christmas 2025 will be challenging for all retail including food, particularly Away From Home. 

Healthy food sales reporting gains momentum 

Healthy food sales reporting is gaining pace, with retailers and manufacturers leading this progress as mandatory reporting moves closer.  

The Food Foundation’s latest report shows that 35% of major UK food businesses now set targets and publish data, up from 24% last year.  

See our latest article – The State of the Nation’s healthy sales reporting.

IGD opinion 

Mandatory reporting, if implemented well, can drive consistency, comparability and meaningful change, helping businesses deliver healthier diets at scale. 

Environmental baselining of England’s farmland  

IGD has developed a compelling value case showing how a comprehensive baseline of England’s farmland can unlock its full potential.  

This approach strengthens food security, reduces environmental impact, and drives good economic growth. By uniting behind a single vision and a co-ordinated national action plan, we can avoid fragmented efforts, maximise value for money, and deliver system-wide benefits. 

Download The Value case for baselining England’s farmland.

New apprenticeship and youth support drive 

The UK Government has announced skills reforms that will create 50,000 more apprenticeships, aiming to boost employment and tackle labour shortages in industries including hospitality and retail. The Government has also announced nearly one million young people will benefit from new training and work experience opportunities under its expanded support programme. This includes roles within hospitality. 

Guidance on HFSS advertising

The Advertising Standards Authority has issued guidance on the ban of paid-for online ads for ‘less healthy’ food and drink products  from 5 January 2026. The ban applies across paid online ads and broadcast media, aiming to reduce children’s exposure to high fat, salt and sugar (HFSS) products. Brands must now ensure compliance with detailed guidance on what qualifies as “less healthy” and how restrictions apply.  

Season’s greetings 

That is all the Economic Bulletin news for 2025. We look forward to bringing you all the latest economic, public policy and consumer news in 2026.