Food cost inflation in the UK has peaked, Premier Foods has said, declaring it is not planning any more price rises for its food products for the rest of the year.
The news came as owner Premier Foods reported a 21 per cent increase in sales in the first quarter of the financial year, compared with a year earlier.
The maker of Mr Kipling cakes, Oxo cubes and Bisto gravy granules, which employs more than 4,000 people across 15 sites in the UK, said it expected its trading profit for the current year to be at the top end of market expectations. However, it said sales growth in its grocery business would “moderate” across the rest of the year, as the effect of higher prices reduces.
Alex Whitehouse, the chief executive of Premier Foods, said the company was benefiting from making ingredients that shoppers can use when cooking at home, as they tighten their budgets in the cost of living crisis.
Its grocery brands, such as McDougalls, Sharwood’s and Batchelors, have been selling well, including flour, cake mixes, and pasta and curry sauces.
“Our portfolio, which helps consumers make good value and nutritious, tasty meals at home, continues to demonstrate a high level of relevance in the current, challenging economic climate,” The Guardian quoted Whitehouse as saying.
The company also saw more growth in its cheaper, non-branded groceries versus its branded groceries. Compared with a year ago, branded items grew over 25 per cent, while non-branded, cheaper items grew by almost 40 per cent, indicating that consumers were turning to cheaper food as the cost of living squeezes household budgets.
Premier Foods said sales of its non-branded sweet treats rose by 86 per cent in the period, as shoppers started buying more cakes, with Mr Kipling sales boosted by new products including brownie bites.
Premier Foods is also set to expand Mr Kipling in the US, where it is now sold in more than 1,400 stores and where it is planning to launch new seasonal products. The company’s cakes are also increasing their sales in Australia, where it said it had reached a record market share of nearly 18 per cent.
Earlier in the year, the company said it would close a factory in Staffordshire as it was “marginally loss-making”, putting 300 jobs at risk.