Value ranges boost Northern Foods' profits
Northern Foods today said around a fifth of annual sales were coming from goods aimed at cash-strapped shoppers as the firm steers a path through recession.
The Goodfella's pizza and Fox's biscuits maker has introduced new value ranges for discounters such as Poundland to sit alongside its main premium business.
Chief executive Stefan Barden said the firm had 'successfully adapted' to the tough environment with a resilient performance.
But he warned: 'We anticipate that next year will be equally challenging, with the continuation of food inflation and competitive pressures.'
Northern Foods, which is behind the Fox's bakery division, claims to have 'successfully adapted' to the tough environment
The Leeds-based firm's pre-tax profits for the year to March 28 were down 5% to £47.5 million, but ahead of City expectations.
The firm said 349 jobs were also under threat as it launched a
consultation over the closure of its Hull site, which has lost a
contract to make ready meals for supermarket Morrisons.
Last year it also mothballed Fenland Foods in Grantham which makes
Italian ready meals, after it failed to agree a deal with the factory's
customer, Marks & Spencer.
Northern's increased value focus includes a relaunch of its San
Marco pizza range in the second half of the year as well as the
introduction of several own-label pizzas for supermarkets.
Its new Oatland Oaties biscuits are also aimed at the cash-conscious shopper, while it has adapted existing products for discounters such as Aldi and Netto.
Northern's bakery division, which makes biscuits and puddings, boosted operating profits from £14.9 million to £20.5 million.
Sales were helped by its advertising campaign featuring cartoon
character Vinnie - a cross between a panda and a dog - which became an
internet hit last year after the firm relaunched the brand.
The group's most popular biscuit, Rocky, is also due for a relaunch
in the autumn. The Fox's brand continues to gain market share,
increasing 9.3 per cent last year compared to the 8 per cent growth
seen in the overall sweet biscuit market.
Northern added that raw material costs were around 12 per cent
higher over the course of the year - with energy bills around 64 per
cent above the prior year.
Although it recovered these costs in higher selling prices, more inflation is ahead with the cost of many commodities still up year-on-year.
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