IGD - Economics bulletin 19 August

Date : 19 August 2021

Your overview of political and economic news with a focus on the food and consumer goods industry, featuring the latest developments and guidance on COVID-19 and adapting to a new relationship with the EU.

COVID-19 self-isolation rules

As of 16 August, all adults in the UK who have been fully vaccinated no longer have to self-isolate if they are identified as close contacts of someone with COVID-19. Therefore, the reasonable excuse exemption scheme for critical workers in England has ended.

Daily contact testing will continue to be available in England at critical workplaces to enable those who have not been fully vaccinated to continue to work.

DEFRA is keeping under review absence levels in all parts of the food supply chain and is requesting businesses complete this absence tracking survey as frequently as possible.

Record demand for new workers

New ONS data shows that unemployment continues to fall from its peak in November 2020. With most UK workers no longer on furlough, and with the economy recovering, employment levels are rising. However, they have not yet returned to pre-pandemic levels.

Demand for labour is strong and the number of unfilled job vacancies has hit a record for the UK resulting in labour shortages in various sectors, including the food and consumer goods industry.

Labour shortages impacting shopper availability

Although absence rates relating to COVID-19 are thought to be falling, broader operational labour and HGV driver shortages are continuing to create challenges for supply chains.

This is resulting in lower order fulfilment levels than normal, meaning there is some impact on availability of food and groceries.

Shopper research conducted for IGD over the weekend of 13-15 August reveals just over half of shoppers (54% vs 56% the previous weekend) continue to experience some availability issues for food and groceries.

28% of adults have recently felt the need to stock up or purchase more than they normally do, down from 32% last weekend.

See the full results here.

Despite the operational challenges due to labour shortages, there are sufficient food supplies within the system and any impact on availability has been limited to date.

HGV driver shortages – new campaign to recruit driving examiners

The Driver and Vehicle Standards Agency (DVSA) has launched a campaign in England and Wales to recruit additional vocational driving examiners.

40 new vocational examiners will be recruited in total, made up of existing DVSA employees and external candidates.

DVSA has already increased the number of vocational driving tests from 2,000 a week pre-pandemic to 3,000 by overtime and allocating additional employees into testing.

Inflation easing for now, but pressures remain

Inflation pressure in the UK economy eased slightly in the latest month, with the Consumer Prices Index falling from 2.4% annually in June to 2.1% in July. Inflation for food and drink remained negative at -0.6%.

However, inflation pressures remain that may need to be passed on to shoppers in the future.

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