Consumers turn to instant noodles in cost of living crunch, says Premier Foods boss
Shoppers are increasingly turning to budget meals amid the cost of living crisis in the UK, the boss of consumer goods giant Premier Foods said today.
The popularity of its instant ramen brands Nissin and Batchelors, which own Cup Noodle and Super Noodles respectively, in the second quarter of this year have jumped, as household budgets become increasingly stretched with inflation hitting 9.4 per cent – a 40-year high.
Grocery sales grew by more than six per cent in the three months to 2 July, as consumers steer towards home cooking instead of dining out, as costs across the country rise.
While the average price for the budget brands’ instant noodles range between 80p and £1.50, consumers could be lured by cheaper supermarket own-brands, financial analyst at AJ Bell, Danni Hewson, cautioned.
“Despite featuring many household favourites, Premier Food’s product portfolio is not immune to the risk of consumers trading down to cheaper supermarket own-brand alternatives,” she said, while questioning “how long Premier Foods can sustain its edge over rising prices.”
Premier Foods’ ability to shield consumers from major price hikes has caught the eyes of investors. The British manufacturer’s share price rose 0.7 per cent to 111.4p per share by afternoon and is up some 5.5 per cent on the year.
“We have made good progress in recovering our input cost inflation through a range of measures, including cost efficiencies and pricing, and we continue to monitor the situation closely. Consumers are increasingly looking to cook tasty affordable meals at home,” CEO Alex Whitehouse said in a statement. “With this positive trading momentum behind us, we remain firmly on track to deliver our expectations for the year.”
Sweet treats also rose by a little over five per cent in the period, carried by popular brands such as Mr Kipling and Cadbury cake, as households turn to smaller rewards instead of larger luxuries like holidays and electronics.
London-listed Premier Foods, which also owns East Asian Sharwood’s sauces, success in the treats department had been carried by an uptick in Australian demand, where it marked its best-ever performance.
With the economic downturn a global trend, Premier Foods saw a 12 per cent boost in its international sales.