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Coronavirus (COVID-19): impacts on health and wealth – IGD

Posted: June 30, 2020 at 4:46 pm

With the UK on the brink of a deep recession and many households facing increasing financial pressure as a consequence of coronavirus, IGDs Chief Economist James Walton explores the relationship between health and wealth and highlights some key considerations for food businesses.

IGD has created hypotheses describing possible long-term effects of Coronavirus on business, health and sustainability. The six hypotheses connected to health and wellness are, briefly:

(A complete discussion of these can be downloaded here LINK)

A strand that links some of these hypotheses together is economics economic outcomes shape the choices made by shoppers and governments.

Unfortunately, the economy of the UK and other Western nations was not performing strongly before the emergence of Coronavirus, leaving little margin to cope with shock.

Average real household income in the UK was broadly flat between 2010 and 20191, household cash resources are limited2 and some households have spent less on food and drink over time3.

Economic pressure has now been amplified by Coronavirus and consequent lockdown measures; the UK government is predicting an exceptionally deep recession and a rapid increase in unemployment4.

Data from ONS suggests that this is already happening, with economic activity slumping and a deterioration in the labour market, with implications for the income of working age households.

Shoppers themselves seem despondent. IGDs ShopperVista surveys show that confidence in personal financial outcomes fell sharply in March and April 2020 in view of recent events, this view is not unreasonable.

Households that see income reduced will be forced to make new choices across the entire household budget, including food shopping.

Social welfare implications are concerning, since many UK households were food-stressed before Coronavirus, relying on food banks and school meals to supplement their diets.

Charities have reported a steep increase in demand the Trussell Trust distributed 81% more food parcels in March 2020 and 89% more in April 2020, when compared with the same months in 2019.

Looking ahead, it is hard to find cause for optimism. With Coronavirus still present and the challenge of EU exit approaching, a quick return to economic growth and better outcomes for households seems unlikely.

It is quite likely that the economic position of many households will worsen before getting better. This may happen rapidly and on a large scale, impacting shoppers at all income levels.

The association between low income and poor health is well-understood. Dietary choices differ markedly between the poorest and richest households in the UK.

Source: Family Food Survey 2017-18, ONS, February 2020

ONS data shows that UK households in the bottom income decile (ie: the lowest 10%) tend to consume far less fruit and veg than those in the top decile, for example5.

Differing diets are reflected in differing health outcomes. NHS data shows that adults are more likely to be overweight and obese when they report multiple indicators of deprivation.

Source: Health Survey for England 2018, NHS, 2019

If, as anticipated, the consequences of Coronavirus and EU exit cause citizens to become less well-off, then they may be expected to make new choices across all aspect of the household budget, including food.

This may mean that the dietary quality of much of the population may decline in the months and years ahead, rolling-back progress made over recent years.

This creates a daunting challenge for government and for public services, but it means challenges for food businesses also:

Amid the economic and biological gloom, it is hard to find much cheer, but there may be room for optimism in certain aspects of diet and health:

These points offer food businesses the chance to open new fronts in communication with shoppers and, more importantly, a chance to present positive messages in hard times.


Coronavirus (COVID-19): impacts on health and wealth - IGD

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