Total sales have fallen at 2 Sisters Food Group by 3.5% to £778.3m in the first quarter of its new financial year.
Like-for-like sales are also down 2.3% to £787.9m in the 13 weeks to 31 October, compared with £806.7m in the same period a year ago.
The food giant, which operates in the poultry, chilled and branded categories, also experienced a 17.7% decline in operating profits to £18.1m.
2 Sisters owner and CEO Ranjit Singh said the performance continued the progress made in the final quarter of 2014-15.
The group added that the figures were in line with guidance, despite continued price deflation and currency headwinds. And the 2.3% dip in like-for-like sales to £787.9m represented quarter-on-quarter progress from £773.6m in the final three months of the previous year.
“With the progress we saw in the fourth quarter continuing, we expect to see our hard work bearing fruit as the year progresses,” Singh said. “This has been reflected in the important successes we have achieved in category reviews and new product development, with notable successes for poultry products, red meat, pizzas, wraps and frozen fish.”
He added: “We have the right strategy, a relentless commitment to great food, innovation and efficiency, and are building great relationships with both our major suppliers and customers.”
2 Sisters also confirmed it had taken over the lease of the Derby factory from the collapsed ethnic ready meal business S&A Foods. It said the move was part of its ongoing investment programme and would help accelerate its protein footprint.
Sainsbury’s has put in a string performance in the 12 weeks to 6 December, with the retailer having grown ahead of the market for three consecutive months, according to the latest supermarket share figures from Kantar Worldpanel. Despite the difficult market conditions, Sainsbury’s increased sales by 1.2%, growing across its convenience, supermarket and online businesses and increasing its market share to 16.7%, Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said. Conditions remained tough for Tesco and Asda, with both seeing a fall in sales of 3.4% as consumers continued to move away from larger stores to the discounters.
Shares in Sainsbury’s have been boosted 4.4% this morning to 246.7p, while also lifting Tesco 3.8% to 148.4p and Morrisons 4.1% to 148.4p.
Shoppers have delayed their main Christmas grocery shop, with more than £6.4bn expected to be spent at the UK’s big supermarkets in the next two weeks, according to market insights agency Nielsen. “Shoppers will leave it late this year – 60% are planning to do their main grocery shop in the week before Christmas,” said Mike Watkins, Nielsen’s UK head of retailer and business insight. “This could provide a welcome boost for grocery retailers, particularly with an extra weekday of trading before Christmas compared to last year. However, it’s the discounters which could make another leap in market share – a third of people are expecting to do their main Christmas shop at Aldi or Lidl.” During the four weeks to 5 December, sales value at the tills dropped -1.0% versus the same period a year ago, Nielsen added.
Earnings before interest and tax (EBIT) at German retail giant Metro Group has come in ahead of expectations at €1.5bn as profits climbed in all three divisions: Cash & Carry, Media Saturn and Real. Like-for-like sales also rose 1.5% to €59.2bn in 2014-15, but reported sales were down slightly on the previous year because of exchange rate and portfolio effects. The group also significantly reduced net debt by €2.2bn to €2.5bn. “The successes of our transformation have become clearly evident in terms of operations,” chairman Olaf Koch said.
Yesterday in the City
Morrisons (MRW) found itself in the rare position of finishing the day as one of the FTSE 100’s biggest risers – before it is set to leave the blue-chip index later this month. The retailer’s stock climbed 0.9% to 140.2p as it launched the first of its Morrisons Daily convenience pilots in a Motor Fuel Group forecourt in Crewe.
It was a mixed day for the other two big listed supermarkets, with Sainsbury’s (SBRY) up 0.8% to 236.9p and Tesco (TSCO) down 0.9% to 143.1p ahead of today’s latest market share data from Kantar Worldpanel.
Elsewhere there was a downward trend for most food and drink and retail and fmcg stocks, with Marks & Spencer (MKS) one of the biggest casualties, falling 2% 455.8p. However, the decline was dwarfed by those suffered by the mining giants, as commodity prices, such as gold and copper, fell further. It dragged the FTSE 100 to 10-week lows, down 1.3% to 5,874.1 points.