Northern Foods CEO Stefan Barden revealed that Tesco was the company's biggest customer as he talked to The Grocer about its first-quarter update, which showed like-for-like sales growth of 5.5% - 4.2 percentage points accounted for by volume growth.
"The spring period is the peak of our sales to Tesco, and the trough of our winter-biased M&S ready meal portfolio, meaning that for this quarter only, Tesco has been our biggest customer," said Barden. "This indicates just how much better balanced our business is versus three years ago."
Northern supplies a range of low-price products to Tesco, including its £1 sandwiches, £1.19 salads and its Trattoria Verdi chilled pizzas.
M&S has been Northern's biggest customer for decades, and became the first major retailer to work with the supplier in 1970. In recent years, M&S accounted for about 40% of Northern's business, but relations cooled and last year Northern mothballed the Fenland Foods site after walking away from a £45m M&S contract.
Barden has diversified the portfolio, building its Fox's and Goodfella's ranges and expanding into the discounters, where Northern's sales have grown 30% year-on-year.
Barden refused to be drawn on whether Aldi, which asked suppliers for a 5% discount last week, had approached Northern.
But he indicated he would not be willing to reduce prices. "We agree our prices up front and don't change them during the year," he said. "All retailers are tough negotiators and you can be sure when they agree a price with you that means they have no better offer on the table. Given that's the case, my motto is stick to your guns."
Barden said Northern planned more brand relaunches later in the year, and that it had upped its marketing and innovation spend. "We're using the recession as a time to invest in the business," he said.