Premier Foods Encounters Worsening UK Consumer Environment
Premier Foods, the UK’s largest domestic food processor, has reported that the British consumer environment has become markedly tougher in the third quarter. Sales of its branded products slipped by 0.5%, despite volume growth of 4.5%, during the quarter and total group sales were down 4.2% owing to a reduction in non-branded sales, which fell by 10.4% in value and by 6.4% in volume.
The period was characterised by declines, in both volume and value, across Premier’s broad range of market categories. According to Premier, this is the first time in many years that it has encountered value decline, which reflects the volume market trend and the promotional activity across all grocery categories.
Despite the worsening category market trends, promotional intensity and commodity cost inflation, Premier still aims to make progress in the full year but the slowdown in the third quarter means this is likely to be more modest. It is also dependent upon Christmas trading, which is by far the group’s busiest sales period, accounting for 30% of the year’s sales in 2009.
