Associated British Foods (ABF), the owner of a host well-known grocery brands, has followed the supermarket multiples in reporting subdued demand over the Christmas period.
In a trading update covering the 16 weeks to 4 January, the group stated that sales in its Grocery unit were level with last year at both constant currency and actual exchange rates, although margin improved.
It did see sales growth in its Twinings business, driven by demand for its herbal teas in the UK and the US. Meanwhile, at Allied Bakeries, operating losses were reduced as cost reductions more than offset the loss of contribution from lower sales. The group added that its ACH unit traded strongly in the US with increased sales volumes and the first contribution from Anthony’s Goods. ABF did not provide updates on its other brands such as Dorset Cereals, Jordans, Patak’s, and Ryvita.
The group’s sugar division continued its recovery with revenue 7% ahead of last year on a constant currency basis. Agriculture revenue was up 10% and its ingredients division secured sales growth of 3%.
Meanwhile, ABF’s Primark chain saw a “marginal decline” in like-for-like sales, although new stores helped drive up sales by 4%.
Including its international business, Primark’s overall sales were up 4.5% due “almost entirely” to an increase in selling space. However, like-for-like performance was said to have improved, driven by a marked upturn in the Eurozone.
Commenting on Primark’s performance, Richard Lim, CEO at consultancy Retail Economics said: “While others are shying away from the high street, Primark continues to increase its market dominance through the acquisition of more physical space and investing in store experiences.
“These solid numbers demonstrate that retailers offering a unique proposition, stand-out in the market and have a laser-like focus on executing their vision can continue to thrive.”
