IGD calls for AI to combat labour cost crunch in food industry
The IGD Economic Viewpoint Report – How to respond to rising labour costs in 2025 – encourages the adoption of new technology.
RISING LABOUR costs, geopolitical risks, and inflation are creating a challenging environment for businesses and consumers alike, says the report.
IGD chief economist James Walton emphasised the urgent need for businesses to ramp up investment in AI and robotics to ensure a thriving and resilient food system. Mounting labour costs, climate change, tariffs, and an increasing population are putting immense pressure on the food system’s resilience, he said.
April 2025 marks a critical point as measures introduced in the Autumn Budget 2024, including the higher National Living Wage and changes to employer National Insurance Contributions, have sharply increased labour costs, particularly for part-time and lower-wage roles. With profits already thin, there is no room to absorb these cost increases, and consumers are likely to end up paying more, says IGD.
The report adds: “The UK food system must grow and improve, not shrink. We need to embrace the next wave of technological advancements, particularly in AI and robotics, to meet these challenges. The necessary technology is now available, and the current pressures make this the perfect time to adopt these innovations.”
