As the economy recovers, what new challenges are emerging?

Date : 27 July 2021
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

IGD’s second edition of its quarterly Viewpoint report is free to download at:https://www.igd.com/social-impact/economics/viewpoint

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