Premier Foods has blamed heavy promoting by retailers on its brands for a fall in sales over the past three months.

The UK’s largest food manufacturer saw first-quarter sales drop by more than 5% in value terms, including a slump of almost 13% on non-branded items.

But sales of its key ‘drive’ brands – which include Mr Kipling cakes, Sharwood’s sauces and Ambrosia desserts – were up 3.4% by value, with volumes up by more than 6%.

Premier also warned that its flagship Hovis brand had lost market share due to heavy promoting by rivals, but insisted it would return to growth in the coming quarter.

“Trading conditions remain challenging, with promotional activity across the market continuing at elevated levels,” said Premier chief executive Robert Schofield.

“Non-branded sales were lower primarily due to promotional activity by brands, the effect of contract exits in 2009 and flour deflation.

He added: “We are progressing well on our strategic cost reduction targets… our cash generation is in line with our targets and net debt should fall by £100m year on year in H1.”

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