Mr Kipling maker says supermarket price war is exceedingly good news


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The Independent Online

Premier Foods, the maker of Mr Kipling cakes and Sharwood’s sauces, is starting to benefit from the supermarkets’ fightback against the discounters.

The chief executive Gavin Darby today said: “The supermarkets are investing [in the price war] and that appears to be coming through in volume growth.

“We are seeing shoppers beginning to buy more, which could be a combination of low inflation and them starting to feel better off.”

According to Kantar Worldpanel, volume growth in the UK grocery market has been increasing, peaking at 2.8 per cent at the end of March.

While one industry measure of household disposable income is at its highest since 2009.

Mr Darby said the company had delivered volume growth of 9% and increased its share of the value of its markets by 3.3 per cent.

Premier, which was subject to a financial restructuring last year which dramatically cut its net debt, said it made a trading profit of £131m, compared with £140m last year.

However, the company’s post-tax losses widened to £92.7m from £46.7m after it wrote down the goodwill on its sweet treats categories, which includes Mr Kipling cakes and Cadbury’s Mini rolls.

Sales of the company’s branded foods slipped from £712.8m to £683.7m for the year to April.

TV advertising of Bisto has helped the company sell more gravy and Homepride flour’s first TV campaign for 10 years has also paid off.

Premier said it would materially step up its marketing campaigns in the coming year, spending 15 per cent -20 per cent more. The first Cadbury cake TV campaign for eight years has recently launched and has generated a resurgence of sales of chocolate mini rolls.  

The company, which was embroiled in a row over payments it demanded from some suppliers last year, said that this particular investment programme was over and would not be repeated this year.

Greencore, the sandwiches maker that went to Hungary to hire staff, said half-year pre-tax profits rose to £26.3m, compared with £8m a year earlier. The food-to-go market  - which includes snacks, sushi and salads  - is growing by 6 per cent a year, the company said.