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Value meat retailer Crawshaw Group (CRAW) has continued to make progress in its turnaround as sales over Christmas improved thanks to a festive hamper and higher footfall in store.

However, the recovery came at the expense of profits as investment in its prices ate into margins.

Sales increased 13% year on year in the five weeks to 1 January, with total customer numbers also up 13%.

The rise came from new space rather than across the board, with like-for-like sales falling 3.8% in the period. This was an improvement on the 8.1% decline in the four weeks ended 27 November 2016. Like-for-like customer numbers were also down 4.2%, with the decline slowing from -9.7%.

Crawshaw said in the Christmas trading statement that the improvement required a level of margin investment, with gross margins in the like-for-like stores shrinking by 1.3 percentage points to 43.6% for the second half of the financial year.

Shares in Crawshaw collapsed 43% in September when the business warned in a trading update that customer numbers were in rapid decline as the supermarket price wars focused on the fresh meat aisles.

The group added this morning it was confident in achieving full-year market expectations thanks to the improving trends of the past two months.

CEO Noel Collett said: “We continue to be encouraged by the customer response to the recent changes we’ve made which have translated into further progress over the festive trading period.

“Our new hamper range was particularly well received with almost 3,000 hampers sold in the Christmas week.

“Our focus will continue to be centred on anchoring our value credentials and we will step up our marketing activity to maintain our current momentum in building customer frequency and loyalty.”

Shares slumped another 4.7% this morning to 24.3p on worries about margins.

Crawshaw also announced that Kevin Boyd will leave the business by mutual consent with immediate effect, with all meat trading and buying responsibility transferred to Mick Charles, who has been promoted to the position of head of buying and supply chain. Charles joined the Crawshaw senior team in November 2014, bringing 35 years of meat industry experience.

Chairman Richard Rose added: “On behalf of the board, I would like to thank Kevin for his loyalty and commitment in his 25 years of service and wish him well for the future. We would also like to congratulate Mick on his promotion; his wealth of meat buying experience has already played a significant role in the recent improvements in sales performance.”

Morning update

Elsewhere on The Grocer this morning we report that annual sales slid by almost £40m at Northern Irish meat group Dunbia in the year its founders put it up for sale as livestock price deflation bit. Turnover for the year to 27 March 2016 slid 4.7% to £787.5m as deflation in livestock prices hit revenues. To read the full story, visit later this morning.

The Grocer also has exclusives on the administration of Preva Produce and latest accounts from Pieminister.

The potato supplier for the likes of Walkers and Kettle has fallen into administration after a difficult end to 2016, leading to 20 redundancies. Click here for the full story.

Profits have increased three-fold to £315k at premium pie maker Pieminister as the expansion of its restaurants and new retail launches helped sales grow 17% to £10.7m in the year to 31 March 2016. The full story is here.

Yesterday in the City

Stevia producer PureCircle soured 6.4% to 235p as it revealed in a trading update that sales fell 14% in the first half to $47m as a result of the seizure of a shipment by US Customs, with the outcome of the case still uncertain.

Tesco (TSCO) and Sainsbury’s (SBRY) softened ahead of next week’s Christmas trading updates, falling 3.1% to 199.1p and 0.5% to 250.9p. Online grocer Ocado (OCDO) was also down 1.4% to 256.7p, but Morrisons (MRW) beat the sector trend, climbing 0.5% to 233p.

B&M European Value Retail (BME) ended the day 0.5% down at 301.7p as some investors took a profit from Wednesday’s 9% jump after its bumper festive trading. The stock was up another 4% until after lunch but fell away in late afternoon trading.

Greencore (GNC) and Coca-Cola HBC (CCH) were also down 1.2% to 240.7p and 0.7% to 1,770p respectively.

Science in Sport (SIS) leapt 6.6% to 76.2p after sales increased more than expected in the year to 31 December. The company said in a pre-close trading update that sales rose 30% to £12.2m during the period.

WH Smith (SMWH) was among the risers, up 3.1%. And Associated British Food (ABF) and Marks & Spencer (MKS) also rebounded by 2.8% and 2% respectively after being affected by the poor Christmas trading at Next earlier in the week.

The FTSE 100 nudged up 0.1% to 7,195.31 points.