East End Foods has suffered a 16.3% drop in pre-tax profit after sharpening its prices in response to stiff local competition.
The wholesaler reported pre-tax profit of £4.1m, down 16.3% year on year, for the year to 30 April 2014, despite turnover rising almost 7%, from £159.6m to £170.3m, according to accounts filed at Companies House this week.
Sales director Paul Deep attributed the profits drop on the more aggressive stance on pricing the company had taken to maintain or increase its market share.
“We’ve adopted that policy because the competition has become aggressive on price,” he said.
The wholesaler had also had to sell commodities such as granulated sugar, flour, grains and lentils at cost to reduce stocks at a time when prices had come down “quite deeply.”
“You have to make a call and ask whether we sit on stock and let it gather dust or bite the bullet, get rid of it and buy more product at the lower price,” Deep said.
He added East End Foods would continue to maintain a competitive stance in the market, particularly on the cash & carry side.