Sales at United Biscuits (UB) fell £46.8m last year as factors including the changing UK retail landscape took their toll.
The Pladis-owned business said the extended hot summer in 2018, competition between supermarkets and the discounters, a reduction in promotional activity, and the sale of an export business had impacted its performance in the 52 weeks ending 31 December.
Revenue dropped 5.4% from £874.5m to £827.7m over the period, with EBITDA falling 5.2% to £128.4m. Operating profit before interest and tax fell 64.9% to £73.2m, which UB said was primarily due to non-recurring profit from the Middle East and North Africa exports business it sold in late 2017.
“The UK grocery market was characterised in 2018 by a changing retail landscape and competition between established grocery retailers and discounters,” stated UB in its annual financial statement. “The company’s new product development, including Flipz, Jacob’s Cracker Crisps Thins and Digestive choc-filled Thins did, however, perform well in the market.”
UB told British Baker its sales had performed well in the first half of this year, aided by the launch of new branded variants such as Jaffa Cake Nibbles and the McVitie’s ‘Let’s Talk’ marketing campaign.
The company added that it had high expectations for its new Team GB sponsorship to drive sales in the run-up to next year’s Olympic Games.
“All signs are that snacking will also remain a particular area of growth for us, with our successful Flipz brand continuing to go from strength to strength,” added a spokesperson.
Citing Kantar data for the year to 8 September 2019, UB said the UK biscuit category was worth £2.95bn and had grown 3%.
“Biscuits remain a must-stock product for retailers, so it’s important that we and our customers continue to keep this key opportunity front of mind, at the same time as generating new sales opportunities through market-leading NPD.”