Premier Foods hit by discounting

City A.M. Reporter
THE country’s largest food producer Premier Foods said that special offers had contributed to a drop in sales, with its Hovis bread expected to lose market share in the second quarter as a result.

The firm, whose brands also include Branston pickle and Bisto gravy, said yesterday that overall first-quarter sales fell by 5.1 per cent.

Brands including Mr Kipling, Ambrosia and Sharwoods cooking sauces saw sales growth, but Hovis suffered with strong competition from Warburton’s and Kingsmill.

Chief executive Robert Schofield said in a statement: “Trading conditions, however, remain challenging with promotional activity across the market continuing at elevated levels.”

The firm’s full-year outlook remained unchanged and it said it expected to cut net debt by £100m in the first-half.

Analysts currently expect the group to post full-year trading profit of about £284m, compared with £323m for 2009.

The company’s shares went down 2.8p to 27.35p, following yesterday’s announcement.