Promotions bite into UK sales for soup group Baxters

Baxters Food Group blamed heavy promotional activity in soups for a decline in group sales in its past financial year.

Sales for the year to 28 May 2011 were £125.8m, down slightly from £129m for the previous 12-month period. But pre-tax profits improved from £6.7m to £7.1m.

Chairman Audrey Baxter said the numbers reflected a “solid financial performance in a tough economic environment”.

“We have operated in economic uncertainty for the last two years and we believe this will continue well into the next two years and beyond,” she warned.

“The volatility in demand, cost of operating and uncertainty of supply make planning very challenging. Our strategy is to focus on our core strengths targeting markets well suited to our product portfolio.”

She blamed the sales dip on “low-margin promotional activity” in the UK, which she warned “shows no sign of easing”. But overseas sales posted a double-digit increase.

Baxter added: “We continue to invest in developing innovative new products. During the period we launched our Stay Full range of slow-energy release soups, a full range of luxury chutneys and entered a new category in meat ambient ready meals.

“The recently completed acquisition of Fray Bentos demonstrates our ability to acquire one of the UK’s best known heritage brands. We are currently considering a number of other options.”