Northern stuck in the deep freeze

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The Goodfella's pizza fairy has failed to sprinkle enough magic to prevent Northern Foods' frozen division from slipping into the red.

Sales of Northern's frozen products fell 24 per cent to £94.7m in the 26 weeks to 2 October, while the division made a £4.6m operating loss, compared with a £5.1m profit the previous year.

The deficit came despite a TV advertising campaign featuring the Pizza Fairy – a waiter wearing angel wings and waving a magic wand – which helped to increase Goodfella's market share from 16 per cent to 20 per cent. But the increase in sales since the brand's relaunch in April was not enough to offset the £5m spend on advertising and new products.

Northern's frozen division was also hit by the termination of contracts to supply Birds Eye pies in June 2009 and the sale of its Dalepak business in August.

Underlying revenues declined by 21 per cent as sales of other frozen products suffered as a result of increasing competition and the high level of promotions.

Northern said the sales fall slowed in the second quarter, while the division was well placed to grow in the second half of the year. Last month it launched an advertising campaign with the comedy duo Armstrong and Miller to push its McDougall frozen pies.

Northern's total sales dropped by 3 per cent to £453m and pre-tax profits fell 8 per cent to £9.6m.

Like-for-like sales were up 2.7 per cent following a strong performance in chilled ready-meals, sandwiches and salads and sales were healthy at Fox's biscuits.