Premier Foods has reported strong sales figures for the quarter covering the Christmas trading period, driven by robust demand, new product launches, and increased prices.
Over the thirteen weeks ended 31 December, the owner of brands such as Mr Kipling, OXO, and Sharwood’s, saw its total sales increase by 12.0%.
Performance was particularly strong in its Grocery division, with sales up 17.4%. Despite industry data showing that many cash-strapped shoppers are switching to supermarket own-label goods, Premier Foods saw sales of its brands climb 15.5% as seasonal lines such as Ambrosia custard and Bisto gravy proved popular. The company noted that higher pricing contributed a “significant proportion” of its revenue growth in the period, but demand was also “buoyant” running into the key festive period.
However, in the group’s Sweet Treats division, sales slipped 0.9%, with branded sales down 10.8% against a 22.8% increase in non-branded sales. Sales of its Mr Kipling brand increased in the quarter, helped by new lines, although its Cadbury cake business was impacted by unscheduled maintenance associated with one of its productions lines. Premier Foods noted that the strong growth in non-branded Sweet Treats was due to contract gains, as well as pricing benefits.
Meanwhile, the group’s International unit reported another quarter of double-digit sales growth (+10.0%), with its Sharwood’s brand growing over 20% following new listings in Canada.
“These results illustrate the continuing appeal of our portfolio of market-leading brands in such a challenging environment and demonstrate the strength and resilience of our branded growth model,” said Chief Executive Alex Whitehouse.
Premier Foods noted that input cost inflation remains at elevated levels, but it was offsetting these pressures by raising prices and cutting costs. The group stated that it had strong momentum entering the fourth quarter of the year, with more brand investment and new product launches to come. As a result, it has retained its full-year outlook,
Premier Foods also announced today that it was in discussion to close a manufacturing facility in the UK, affecting about 300 jobs. The Knighton site makes predominantly non-branded powdered beverages. The group said that it was unprofitable and its proposal would see existing non-branded revenue contracts worth around £27m exited from mid-2023. Premier Foods stated that affected staff would be supported and consulted with throughout the process.
