Most international food and grocery companies are confident about their futures and believe the industry will continue to grow in the coming years, new research reveals.
A study from global research company IGD shows 82 per cent of those surveyed are confident about their company and 53 per cent think that global grocery firms will outgrow the rest of the economy over the next five years.
Failed crops across the globe have pushed up cotton and wheat prices in the last year and the last few months have seen a steady rise in petrol prices.
It is no surprise then that 75 per cent of respondents predict higher ingredient prices and 68 per cent feel energy prices will grow over the next 12 months.
Despite many UK retailers suffering a poor winter of trade, grocers have emerged as the most resilient in the sector with companies like Sainsbury’s and Waitrose performing strongly.
Joanne Denney-Finch, CEO of IGD, commented: “Food and grocery companies clearly see themselves facing several cost pressures including higher ingredient and energy costs.
“But operating in such a competitive market place they are continually reassessing their operations to ensure maximum efficiency, which should help cushion shoppers from the full impact of the increases.”
Efforts to innovate and limit staffing costs seem to be behind the industry’s confidence, with a huge 80 per cent of companies surveyed claiming their investment in new product development has increased or been kept at similar levels over the last 18 months.
Official government data in the UK has shown that wages have not kept pace with inflation over the last few months and a prediction that this trend may continue may be behind 57 per cent of respondents predicting their labour cost to decrease or stay the same during 2011.
Denney-Finch added: “Although global economic conditions are tough, food and grocery companies are more resilient. Our survey shows they are confident about their prospects compared to other industries.
“This confidence is based on a drive to innovate and to build on value for money as customers feel the pinch from increases in the cost of living, such as higher petrol prices.”