Price pressures hit Premier Food sales

BRANSTON pickle and Mr Kipling cakes company Premier Foods warned yesterday that its Hovis bread brand risked losing market share amid increased promotional activity by rivals.

Premier, which has a substantial manufacturing presence in East Anglia, including a factory in Bury St Edmunds, said that Hovis boosted its share in value terms to 25.6% during the first three months of 2010.

But this trend was now under pressure to due competition from brands such as Warburton’s and Kingsmill, both owned by rival group Associated British Foods.

However, Premier added that it expected a fightback by Hovis during the second half of this year as a result of its own marketing and promotional activity, highlighting the recent conversion of the entire Hovis range to 100% British wheat.

Across its business as a whole, Premier said trading conditions remained difficult due to “elevated” levels of promotional activity in the food sector.

Sales of its branded ranges grew in volume by 2.2% during the first quarter but price competition meant that, in value terms, sales fell by 0.3% during the period.

The was despite a strong performance by key brands such as Mr Kipling, Ambrosia and Sharwoods cooking sauces, which saw growth of 6.6% by volume and 3.4% by value.

Most Read

Non-branded sales were sharply lower due to promotional activity and lower flour prices, Premier added.

Premier It added that it remained cautious about the trading environment, but forecast “further progress” in 2010 assuming “no adverse change” in the current conditions.