Food inflation to decline but widespread price cuts still unlikely: IGD

Consumers eating or drinking out said they have reduced spending since March.

Food inflation will steadily decline over 2023, reaching 9% by December however widespread price cuts are still unlikely at this time and a depressed volume of sales is expected until March 2024, James Walton IGD Chief Economist said.

According to July’s Economics Viewpoint Report from IGD, there are complex challenges business leaders will face amidst a landscape of low consumer confidence. The report recommends that the sector will require progressive leadership and a collaborative approach across the whole supply chain to adapt to these changes.
 
Whilst wage growth remains strong, IGD’s analysis shows that, in real terms, UK households will struggle for some time, detailing how 66% of lower-income households are reducing spend on groceries and 54% are reducing the amount of food and drink consumed at home.

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The latest consumer research conducted for this new report from IGD highlights increased pressure on those with the lowest incomes, with 54% reducing the amount of food and drink consumed at home compared to 36% in the higher income group.

“Labour pressures may be the industry’s Achilles’ heel, driving costs while undermining capacity. Resolving this is key to long-term industry resilience and the focus on this issue will increase as it becomes more urgent. This comes as consumer confidence is low,” Walton said.