A dismal third-quarter performance at Marks and Spencer’s food division dented results at its biggest own-label suppliers Uniq and Northern Foods, which both announced lacklustre festive trading figures this week.
Uniq’s like-for-like sales to M& S - which accounts for almost half of its UK business - were “significantly below the level we anticipated,” said the supplier, which is also slashing up to 180 jobs at its Spalding site after losing a £12m prepared salads contract with Sainsbury. However, stronger performances on the continent meant that group sales were down just 0.6% in the 13 weeks to December 25 compared with a 4.8% drop in the first half.
Analysts said that although the Sainsbury setback would be offset by a £20m contract with Tesco for own-label desserts, it would take some time before Uniq saw the benefits of its recent restructuring filter through to its bottom line.
Northern Foods’ new CEO Pat O’Driscoll also reported disappointing results in the company’s chilled division “reflecting in particular our trading with M&S”. Underlying sales were up 1.3% in the 13 weeks to January 1 - a drop on the 5.6% rise in the second quarter.