New look for Hovis as bread sales nudge up

23 April, 2013

Premier Foods – the parent company behind the Hovis brand – said this morning its bread would soon get a new “packaging redesign” as it unveiled a first quarter increase in sales of 0.8%.

The company, which has placed Hovis as one of its so-called Power Brands, said it was continuing with a major restructuring of its bread business and that its market share for bread was “broadly unchanged”.

Premier said its total sales, excluding milling, were £327m, up by 1%, and that branded sales had increased by 2.2%. Its Grocery Power Brands increased 3.5%, and had improved for the fifth successive quarter.

It said: “The bread business is focusing on a major restructuring programme during this year, with the closure of three bakeries, two distribution centres, a mill and a significantly reconfigured logistics network. This programme is on track, with the closures of the Eastleigh bakery and Glasgow mill having been completed in the first quarter.”

It said that savings from the restructuring programme were expected to offset the margin lost from the previously announced £75m contract loss, which is expected to take effect by the end of April. Its bread business will also move to its High Wycombe offices in the third quarter of this year.

Gavin Darby, chief executive, said: “I am pleased to report continued momentum in our Power Brands in the first quarter. This represents the fifth successive quarter of sales growth for our Grocery Power Brands, demonstrating that our strategies of investing in marketing and improving customer collaboration are working. Five of our Power Brands have been on TV in the past weeks, with more to come in the second quarter.

“The restructuring of our bread business remains on track while the benefits of the previously announced £20m of overhead cost savings in 2013 are being delivered.

“Despite a continued challenging consumer environment, I believe we have the right strategies in place to make further progress this year, with expectations unchanged.”





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