The Big Food Group has stated that the sales drop in its core Iceland and Booker businesses has continued for the last six months during a period of increased competition in the UK retail environment.
The group, which is in takeover talks with Icelandic retailer Baugur, said its pensions issues had been resolved in principle and it is continuing to co-operate with Baugur in relation to its possible offer for the company.
Over the 24 weeks to September 17, total sales fell to £2,288m from £2,390m a year earlier. The group reported an operating profit of £3.6m compared to £18.6m the year previously.
The company noted that Booker continued to improve sales though its Premier fascia but its total sales were £1,550m compared to £1,658m in 2003. This decline was attributed to a move away from phonecards towards e-top up cards, which are accounted for as commission only.
While Iceland accelerated the roll-out of its new format stores, sales at the supermarket business fell by 2.7% from 2003, due to weaker sales in the frozen goods category caused by increased competitor promotional activity. Sales of ice-cream and also barbecue goods were both down by 15% due to poor summer weather.
Chief executive of The Big Food Group Bill Grimsey, said: “The UK food retailing market has undergone significant changes over the last two years with the large supermarkets entering the convenience and neighbourhood markets and consolidation driving prices down.
“The Group has responded robustly to these challenges with the accelerated roll out of its strategic initiatives and further cost efficiency measures. Due diligence with Baugur is progressing, and, importantly, the pensions issues have been resolved in principle,”
The group, which is in takeover talks with Icelandic retailer Baugur, said its pensions issues had been resolved in principle and it is continuing to co-operate with Baugur in relation to its possible offer for the company.
Over the 24 weeks to September 17, total sales fell to £2,288m from £2,390m a year earlier. The group reported an operating profit of £3.6m compared to £18.6m the year previously.
The company noted that Booker continued to improve sales though its Premier fascia but its total sales were £1,550m compared to £1,658m in 2003. This decline was attributed to a move away from phonecards towards e-top up cards, which are accounted for as commission only.
While Iceland accelerated the roll-out of its new format stores, sales at the supermarket business fell by 2.7% from 2003, due to weaker sales in the frozen goods category caused by increased competitor promotional activity. Sales of ice-cream and also barbecue goods were both down by 15% due to poor summer weather.
Chief executive of The Big Food Group Bill Grimsey, said: “The UK food retailing market has undergone significant changes over the last two years with the large supermarkets entering the convenience and neighbourhood markets and consolidation driving prices down.
“The Group has responded robustly to these challenges with the accelerated roll out of its strategic initiatives and further cost efficiency measures. Due diligence with Baugur is progressing, and, importantly, the pensions issues have been resolved in principle,”
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