Premier Foods has promised no further price increases for the rest of the year, as it believes that inflation has now passed its peak.
The pledge was given as part of the business’ first quarter trading update. Driven once again by soaring own-label sales, Premier Foods reported continued growth of its sweet treats division, which it said demonstrated ‘an improving trend’. Its bakery brands include Mr Kipling and Cadbury cakes.
A year-on-year Q1 increase of 7.6% was recorded by the division, with total sales up from £55.4m to £59.6m. The trajectory for sweet treats is expected to build through the second half of the year, the company noted in its trading outlook.
Branded sweet treats appeared to recover from the 2.4% drop over the past financial year, which had been affected by unscheduled maintenance to a Cadbury cake production line late last year. Revenue hit £50.1m during the first quarter of this year for a slight improvement of 0.4% compared to Q1 2022 results.
Premier Foods revealed that Mr Kipling sales had increased by 3.6%, benefitting from new product launches such as Signature Brownie Bites and activity commemorating the King’s Coronation. Internationally, Mr Kipling was reported to have achieved a record level of market share (17.6%) in Australia, boosted by investments in TV ads, and had reached distribution in over 1,400 stores in the US. The introduction of additional seasonal products was also planned for the coming months, it said.
Own-label sweet treats, meanwhile, carried on bounding from last year’s leap of 30.5% by setting an impressive 86.2% sales growth for Q1 2023 (from £5.1m up to £9.5m). According to the business, the high growth was due to contract gains in pies and tarts and pricing benefits on existing product lines.
“With this positive momentum, and strong plans behind our leading brands for the remainder of the year, we now expect FY23/24 Trading profit to be at the top end of market expectations,” said Premier Foods CEO Alex Whitehouse.
“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,” he added.