Premier Foods, the company behind a host of brands including Ambrosia and Mr Kipling, says selected discounting helped drive strong Christmas sales growth and there are plans for more price cuts ahead.
Premier, which also holds Bisto, Loyd Grossman and Oxo in its stable, said group sales in its third quarter were 14.4% up compared with the same period a year ago.
The performance was led by sweet treats, it said, rising 21.3% by value.
It claimed market share gains of more than 120 basis points and said that the performance meant it was on track to meet its previously expanded expectations for annual profits.
Premier credited a series of discounts during the Christmas quarter for much of the sales growth – price reductions that are likely to have been passed on by supermarket chains due to a high level of promotional activity.
A report by Kantar Worldpanel following the festive season found that a third of groceries were discounted in December as chains moved to lock in customer loyalty for the big Christmas shop.
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Chief executive Alex Whitehouse said: “The lower promotional price points we introduced in the third quarter have positively impacted performance while also helping consumer budgets go further.
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“These lower prices will be extended to additional products such as Loyd Grossman cooking sauces and Mr Kipling Bakewell slices in quarter four.”
Premier’s shares rose fractionally at the market open.
Its level of profitability will be of interest to the Competition and Markets Authority (CMA) as it investigates whether price rises across the grocery sector, since Russia’s invasion of Ukraine, have been fair.
The regulator, which has cleared supermarkets of profiteering, has been examining the supply chain and especially the providers of branded goods who have blamed surging energy and commodity costs for price hikes.
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The most recent CMA report found instances of shoppers being overcharged in areas including baby formula, baked beans, pet food and mayonnaise.
While the pace of price rises in food has eased significantly, it reached unprecedented levels last spring.
The CMA has expressed hope that strong competition from supermarket-owned brands will help drive down the cost of branded goods further.
But Premier’s trading update built on the trends seen across the retail sector over Christmas; that cash-strapped shoppers prioritised food and drink over spending on goods, especially so-called big ticket items such as high-end electronics.
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Official figures last Friday suggested households wanted bargains as retail sales volumes fell sharply in December compared to the Black Friday month of November.
The owner of Primark said on Tuesday that despite a strong Christmas, underlying sales growth slowed during the last quarter as a whole.
It said that like-for-like sales rose 2.1% in the 16 weeks to 6 January, down from the 8% rate seen over the previous three months.
