Latest results from Premier Foods confirm it has benefitted from consumers eating the majority of their meals at home in recent months. However, the maker of a host of leading food brands said that whilst its sales remain strong, it expects trends to normalise in the weeks ahead as people gradually return to eating out.
The group’s overall sales jumped 22.5% during its first quarter to 27 June. This was driven by branded sales which surged up 27% after all its major grocery range delivered double-digit growth. Premier Foods highlighted that it saw particularly strong performances from its Ambrosia, Oxo and Sharwood’s brands, whilst sales of Nissin noodles more than doubled.
The group stated that high availability levels of its products during the period of increased demand had helped it grow ahead of its categories, with market share gains seen in flavourings & seasonings, quick meals snacks, soups and cakes.
Premier Foods also noted its strong growth in the buoyant online channel. Over the last couple of years, the group has been investing in its online proposition. This helped it tap into the wider market trend, with the company seeing growth of 115% in the quarter and gaining 270 basis points of market share in the channel.
By division, Grocery saw revenues jump 31.7% to £162.1m – driven by branded sales that surged up 39.2% on last year. Premier Foods stated that it had benefitted from more households buying its brands to cook meals during lockdown.
“We have also observed significant increases in household penetration of our brands in the quarter, as Britain has got cooking again and consumers expand their repertoire of dishes prepared at home,” said Chief Executive Alex Whitehouse.
However, performance in its Sweet Treats division was more subdued with sales only growing 0.7% to £52m. Cake volumes were said to lower than the prior-year in the earlier part of the period, but picked up towards the end following an advertising campaign for its Mr Kipling brand and new product launches.
Looking ahead, Premier Foods said its sales growth rate was starting to slow as the hospitality sector began to reopen and people began eating out of home more.
Last month, the company forecast revenue and profit for the current fiscal year would beat estimates. It said these recently-upgraded expectations remained unchanged, which included further debt reductions.
Premier Foods concluded: “Looking to the full year, the group expects to make further progress as it continues to employ its successful branded growth model strategy, which has been instrumental in delivering twelve successive quarters of UK revenue growth.”
