Premier Foods see LFL sales fall by 3.2%

Grocery products and confectionery supplier, Premier Foods has seen like-for-like sales drop by 3.1% in the 13 weeks ended July 1, in line with its expectations.

The company behind brands such as Ambrosia, Batchelors, Bisto and Mr Kipling, Homepride and Sharwood's, as well as its own-brand products, said the fall was due to lower sales volume in the grocery division, notably in desserts.

While the Grocery business saw encouraging market share gains in major retailers, volume was hit by warmer weather in June and lower promotional effectiveness.

Grocery sales declined by 5.6%, as a 7.9% drop in branded products offset 8.9% growth in non-branded products. Sweet Treats, however, grew sales by 3.8%, thanks to 1.4% growth in branded goods and 18% growth in non-branded goods.

During the period, international sales increased by 20%, which Premier Foods said marks its 11th successive quarter of growth, and it said its cost savings programmes are on track.

The firm anticipates stronger trading in the second quarter, as it begins to see a reversal of the reduction in multi-buy promotions which hit its Grocery volumes in the second half of the prior year.

Chief Executive Gavin Darby said, 'Our first quarter sales were lower than last year, as we expected, primarily due to lower sales volumes in the grocery categories, notably desserts.

'At the retail level we have continued to outperform our markets and industry peers, our international business grew 20 per cent in the quarter, and our cost savings programmes are on track.

'We expect to report positive sales growth in the second quarter, broadly flat sales in the first half and our expectations to deliver progress in the full year are unchanged.'