In a third-quarter trading update today, Associated British Foods (ABF) revealed that sales in its Grocery unit declined as it faced tough comparisons with the exceptionally high levels of spending in supermarkets during the first lockdown.
Over the 16-week period to 19 June, its Grocery revenues fell 3% to £871m, having grown 9% in the same quarter last year. However, the latest figure was still 6% ahead of the pre-pandemic levels of two years ago as demand for its products in the retail channel remained elevated.
Twinings Ovaltine sales were said to be “well ahead”, with the segment decline driven by ACH, George Weston Foods and UK Grocery.
Although sales over the quarter were down at AB World Foods, Jordans and Dorset Cereals, Ryvita, Silver Spoon and Acetum, all brands grew sales compared to pre-Covid.
At Allied Bakeries, the group said volumes had reduced as expected due to the exit from its bread supply contract with the Co-op in April. ABF stated that cost reductions had been made to mitigate the loss in contribution.
For the full year, the company expects Grocery revenues to be ahead of last year but for operating profit to decline by a mid-single-digit percentage compared to last year as a result of a margin reduction in its ACH business caused by higher corn oil costs.
For the ABF group as a whole, revenues surged up 47% to £3.65bn after its Primark unit continued its recovery.
Sales at the discount fashion retailer jumped 207% to £1.61bn as lockdown restrictions lifted and people rushed to refill their wardrobes with clothes for social occasions. The figure was 3% above the same quarter two years ago before the pandemic, with Primark saying it had gained market share in the UK following the recent demise of high street chains such as Karen Millen and Arcadia’s Topshop.
NAM Implications:
- Worth comparing your business performance…
- …with these ABF figures in categories and formats.
- And checking any differences for reasons why…
