In a brief AGM statement at the end of last week, Associated British Foods (ABF) stated that its outlook for the current financial year remained unchanged, although it noted that it had seen the volatility of input costs beginning to ease.
The owner of the Primark chain and various well-known grocery brands still expects “significant” input cost inflation. However, Finance Director John Bason said the aggregate profit of its Food businesses was still forecast to be ahead of last year.
Posting its annual results last month, ABF revealed that it was planning further price increases across its grocery brands that will help offset a decision to keep prices steady in its fast-growing Primark clothing chain.
ABF stated last week that trading at Primark during its new financial year had been “encouraging” with it on track to open 27 new stores during the period.
“For the full year, we continue to expect significant growth in sales for the group, and adjusted operating profit and adjusted earnings per share to be lower than the previous financial year,” said Bason.
NAM Implications:
- Patently, those businesses that have been fortunate enough to get adequate price increases away…
- …have been able to neutralise input cost increases and stabilise profitability….
- …to the detriment of weaker rivals.
- Important that all businesses go back to fundamentals:
- Decide what business they are in
- Strip back to essentials
- And try to optimise even the slightest competitive difference
