Food and drink firms buoyed as lockdown lifts but challenges remain – poll

Britain’s food and drink firms are starting to see the “light at the end of the tunnel” thanks to the UK’s rapid vaccine rollout and easing of lockdown restrictions, a survey has revealed.

The latest business confidence report by the Food and Drink Federation (FDF) showed that firms were more positive at the start of 2021 due to the prospect of hospitality returning to normal as restrictions lift.

But the survey of food and drink manufacturers across the UK found the sector is wary of future challenges over rising unemployment, surging inflation and border issues following Brexit.

The report’s net business confidence score rose to minus 14 in the first quarter – still in negative territory, but better than the minus 34% seen at the end of last year.

Mark Harrison, economic research and employment policy manager at the FDF, said: “After a turbulent year, food and drink manufacturers are beginning to see the light at the end of the tunnel following the challenges of 2020 and early 2021.

“The successful rollout of the UK’s vaccine programme and the lifting of lockdown restrictions has meant that businesses are more confident than they were at the end of 2020.”

But he added: “Increased business costs and issues with customs are still causing concern for our sector.”

Those polled saw sales fall in the first quarter as the third lockdown shut hospitality for everything except takeaways.

However, businesses were more optimistic over their own prospects and those of the UK economy in 2021, with more than three quarters (77%) expecting output to increase and more than two thirds (68%) expecting business confidence to increase.

The survey of 22 firms – with a combined turnover of more than £5 billion – was conducted between April 9 and 30, as the hospitality sector began to open across England.

Pubs, bars and restaurants – and their suppliers – have been hammered by coronavirus restrictions over the past year.

They were allowed to reopen for outdoor dining on April 12, followed by indoor hospitality from May 17, with social distancing measures still in place.