Boom in branded treats not enough to offset overall grocery sales
Premier Foods has reported a slight uptick in sales thanks to a few booming branded categories, although non-branded goods suffered.
The company told markets this morning that grocery sales fell 2.7 per cent to £174.7m in the first quarter of the year, with branded sales also down.
Overall sales at the company rose 0.2 per cent year on year.
Non-branded grocery revenue fell 8.8 per cent due to consumers switching brands and Premier’s decision to exit some lower margin contracts.
Sweet Treats branded sales, meanwhile, grew 11.4 per cent, thanks to new products innovations like Mr Kipling Signature Brownie Bites and Birthday cake tarts.
Newly-acquired brands The Spice Tailor and FUEL10K both delivered double-digit UK sales growth.
Overseas revenue grew by five per cent at constant currency, with “good sales growth” in Australia.
New products accelerating
Alex Whitehouse, chief executive officer, said: “We continued to grow volume and value market share overall, despite the impact of recent warmer weather on some grocery categories.
“We expect branded revenue growth to build through the year, as we launch further new products, such as FUEL10K yogurt and granola pots.
“Our profit expectations for the full year are unchanged, underpinned by our proven branded growth model and ongoing cost efficiency programmes.”
The second half of the year will see an acceleration in new product development launches, Premier Foods said.
The Spice Tailor is extending into Mexican meal kits, FUEL10K will enter the chilled aisle with high protein yogurt and granola pots, and Bisto brings Peri-Peri gravy to market, to attract more younger consumers.
“All in, within a more demanding and less favourable trading context, we are encouraged by the ongoing consistent, broad-based and long-term progress from Premier.
“We look forward to the delivery of good ongoing financial progress whilst awaiting, with some excitement, whatever may emerge on the additive and hopefully accretive M&A front,” Shore Capital analyst Clive Black said.