Poor bakery sales in the UK have helped to cause a decline in Maple Leaf Food’s fortunes.

The Canadian firm, which sells bagels here under the New York Bakery Co brand, blamed lower sales volumes in the UK bakery operations for its falling figures; sales fell to C$381.5m (£246.8m) from C$412.5m (£266.8m) in the bakery products group in the first quarter ended 31 March 2010. Maple Leaf also pointed to the impact of the stronger Canadian dollar and lower sales volumes in its North American frozen bakery operations.

The company said it was taking steps to reduce the cost base in the company’s UK operations until volumes improved, while it expected the fall in North America to be transitory as new business was gradually being secured. It added that the declines in these two business units were more than offset by improved performance in its fresh bakery business.

Said Michael H McCain, president and CEO: "The bakery business experienced a weaker quarter due to performance in the UK and the North American frozen bakery business. How-ever, we are seeing signs of improvement in both these areas as volumes recover and our cost reduction initiatives take hold."

He added: "This, along with price adjustments being implemented mostly in the second quarter, gives us confidence in expecting stronger margin growth and continued improvement through the remainder of 2010."

Overall sales at Maple Leaf Foods for the first quarter fell by 7% to C$1,191.5m (£770.8m) from C$1,279.3m (£827.3m) last year.