UK Food & Drink Sector Update – November 2023

Mixed outlook for the UK Food & Drink sector in 2024.

Tokio Marine HCC have released their Food & Drink Sector Report for 2023 which analyses the ongoing impact of high interest rates and restricted consumer spending throughout the industry.

With the cost-of-living crisis becoming less pressing, there are signs that the restriction on consumer spending is easing:

According to data from the Office for National Statistics (ONS), the annual increase of the consumer price index had slowed down to 6.7% in September, down from the double digits recorded in the second half of 2022 and January to March 2023.

TMHCC suggest that Food price inflation is driving this general trend. Having reached 19.2% in March, it has now eased to 12.2% by September, according to ONS figures.

This is being driven by reductions in the price of dairy products as well as mineral waters, soft drinks and juices as a result of reduced supply chain risk.

However, all food-related sectors, such as manufacturing, retail and service industries, have recorded above-average increases in insolvencies this year due to poor economic growth and high interest rates.

For the UK as a whole, the number of business failures has increased by a sizable 14% in the first three quarters of 2023.

With the economy slowing and high interest rates, business insolvencies across all sectors are expected to increase further in 2024.

For more information on how Credit Insurance can protect your business, contact the Clearview Team today.

You can read the full report from TMHCC here.