The range rationalisation at Marks and Spencer’s food division would benefit category leaders such as Uniq as slow sellers are ditched and a new ‘less is more’ approach is developed, said Uniq chief executive Bill Ronald.
Speaking as the chilled food specialist posted a 5% drop in turnover to £424.4m on continuing businesses for the 26 weeks to September 25, Ronald said Marks and Spencer’s decision to slash more than 10% of its SKUs in food and simplify its formats was good news for his company.
Uniq has more than 40% of its UK business with the ailing high street retailer, with a particularly strong presence in its sandwiches and wraps category.
He was also confident that Uniq’s UK operation would start producing better numbers following a restructuring programme that concentrated production in a smaller number of large, modern sites. Although exceptional costs - largely generated from the UK restructuring - plunged the group into the red, with a £14.2m pre-tax loss compared with a £6m profit last year, Uniq had also picked up £20m of new business in the UK, he said.
This included a £6m deal with Morrisons for desserts and salad and a £6m deal with Tesco for cottage cheese, which had helped to mitigate the loss of a major contract with Sainsbury.
The French operation, which underwent a significant restructuring programme two years ago, was now producing good results, particularly in spreads, he added.
The company, which is being courted by private equity firm Duke Street Capital, had also generated significant cost savings through supply chain initiatives, supplier rationalisation and more centralised purchasing on raw materials and indirect goods and services, said Ronald.