After 21 years at the BRC, I’ve learned one lesson above all others: when the cost of selling food rises, the cost of feeding the nation rises too.
For more than two decades, I have had the privilege of working alongside food retailers through some of the biggest shocks the UK food system has faced. Through Brexit, Covid, climate change and wars, retailers have helped keep food moving, shelves stocked and prices as low as possible.
That record matters because food retail is one of the UK’s great success stories. Our supermarkets are the most efficient and affordable in western Europe. They operate on wafer-thin margins and compete fiercely every day for customers’ spending. When costs increase, retailers do everything they can to absorb them before they reach shoppers.
But as I prepare to leave the BRC, there is still no indication policymakers understand the pressure the food system is under and its ability to absorb ever-growing costs.
After five years of rising prices and reducing affordability, how can we return to the post-war trend of increased choice and falling prices, economic growth and job creation? The answer is not more costs, more taxes and more regulation.
Food retailers face a perfect storm. Geopolitical instability continues to threaten global supply chains. Climate change is increasing pressure on agricultural production around the world. Energy remains significantly more expensive than before the pandemic. Labour shortages persist in key parts of the supply chain. Consumer confidence remains fragile.
Yet at precisely the moment when government should be focused on helping businesses invest and grow, retailers are facing a wave of additional costs.
Employment taxes have risen sharply. National Insurance increases have added billions to costs across retail. Business rates remain one of the highest property tax burdens in the developed world. Energy bills continue to include substantial policy and network costs. Environmental charges and packaging levies are growing rapidly. New regulations arrive from multiple departments, often with little regard for the cumulative impact on businesses that must implement them.
Individually, many of these policies may have merit. But together, they risk creating a system that makes it harder to keep prices low, invest in productivity and create jobs.
I know how conscientious retailers are, they support regulation and enforcement. Consumers rightly expect high standards on food safety, sustainability and transparency. But good regulation should achieve outcomes efficiently. Too often, businesses face overlapping requirements, duplicated reporting and multiple schemes pursuing similar objectives in different ways.
A better approach to regulation
A better approach would focus relentlessly on outcomes, while reducing complexity and cost.
The stakes are high because retail’s role extends far beyond the weekly shop. The sector remains one of the UK’s biggest private sector employers and the largest source of first jobs. Around one in five workers gets their first job in retail. For many young people, retail provides the first step into the labour market, helping them develop confidence, skills and experience.
When the cost of employment rises, those entry-level opportunities become harder to create.
That should concern all of us. At a time when youth unemployment is rising and too many young people are disconnected from work and education, we should be making it easier, not harder, for businesses to hire.
Food retailers want to play their part. They are investing billions in stores, supply chains, technology and sustainability. They are working with suppliers to strengthen food security and reduce environmental impacts. They are committed to helping communities and creating opportunities.
But they cannot do it alone.
Government needs a simple test for every new tax, cost or regulation: will this help or hinder investment, job creation and affordability? Because the future challenges facing our food system are already significant enough.
The past 21 years have been an amazing experience. The development of the industry and our members’, its resilience, innovation and commitment to customers has been fantastic to witness. Give them the right conditions and they will continue delivering what matters most: affordable food, rewarding jobs and investment in every community across the country.
But optimism alone cannot keep prices low. That requires policymakers to recognise a simple truth: every unnecessary cost added to the food chain ultimately makes it harder to deliver the affordable food and economic opportunities upon which households depend.
Andrew Opie is director of food and sustainability at the BRC
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