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| Version 1 | Version 2 |
|---|---|
| Mr Kipling maker hit by shoppers' switch to own-label products | Mr Kipling maker hit by shoppers' switch to own-label products |
| (6 months later) | |
| Premier Foods – which also makes Ambrosia rice pudding and Bisto gravy –reports dip in first-quarter sales | |
| Julia Kollewe | |
| Thu 20 Jul 2017 09.29 BST | |
| Last modified on Mon 27 Nov 2017 19.50 GMT | |
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| The trend among shoppers to switch to cheaper non-branded products as household budgets come under mounting pressure has been underlined by a 9% leap in sales of own-label groceries produced by food group Premier Foods over the last three months. | The trend among shoppers to switch to cheaper non-branded products as household budgets come under mounting pressure has been underlined by a 9% leap in sales of own-label groceries produced by food group Premier Foods over the last three months. |
| At the same time sales of Premier’s branded products – which include Mr Kipling cakes, Ambrosia rice puddings and Bisto gravy – slumped by nearly 8%. | At the same time sales of Premier’s branded products – which include Mr Kipling cakes, Ambrosia rice puddings and Bisto gravy – slumped by nearly 8%. |
| Overall sales of branded and own-label foods were down by 3.1% . | Overall sales of branded and own-label foods were down by 3.1% . |
| In the desserts business, sales of branded products climbed 1.4% – but sales of non-branded products (puddings produced for supermarkets’ own-label ranges) surged by nearly 18%. | In the desserts business, sales of branded products climbed 1.4% – but sales of non-branded products (puddings produced for supermarkets’ own-label ranges) surged by nearly 18%. |
| Brits are increasingly opting for supermarkets’ own-label products as they try to manage the impact of rising inflation and falling real wages on family finances. Recent research by Kantar Worldpanel showed that supermarkets’ own-label sales rose 6% year on year, while branded products edged up only 0.6%. | Brits are increasingly opting for supermarkets’ own-label products as they try to manage the impact of rising inflation and falling real wages on family finances. Recent research by Kantar Worldpanel showed that supermarkets’ own-label sales rose 6% year on year, while branded products edged up only 0.6%. |
| As households feel the squeeze, shoppers are seekingbetter value for money by heading to discount chains and buying budget basics. | As households feel the squeeze, shoppers are seekingbetter value for money by heading to discount chains and buying budget basics. |
| Premier said retailers are also cutting back on promotions, and it blamed the warm June weather for slowing sales of cooking sauces, flavourings and seasonings. | Premier said retailers are also cutting back on promotions, and it blamed the warm June weather for slowing sales of cooking sauces, flavourings and seasonings. |
| The company has also been hit by rising costs linked to the fall in the pound since the Brexit vote. | The company has also been hit by rising costs linked to the fall in the pound since the Brexit vote. |
| Premier stuck to its forecasts for the full year, saying it would return to sales growth in the second quarter and post flat sales for the first half. | Premier stuck to its forecasts for the full year, saying it would return to sales growth in the second quarter and post flat sales for the first half. |
| Chief executive Gavin Darby is under pressure to improve the firm’s performance after rejecting a £1.5bn takeover offer from US rival McCormick last year. This week McCormick agreed to buyer Reckitt Benckiser’s food business for $4.2bn (£3.2bn). | Chief executive Gavin Darby is under pressure to improve the firm’s performance after rejecting a £1.5bn takeover offer from US rival McCormick last year. This week McCormick agreed to buyer Reckitt Benckiser’s food business for $4.2bn (£3.2bn). |
| Premier shares rose by 2.6% to 39.75p. McCormick offered to pay 65p a share for the company in April 2016. | Premier shares rose by 2.6% to 39.75p. McCormick offered to pay 65p a share for the company in April 2016. |
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