Crawshaw management said today that its turnaround strategy was starting to show results following a slowdown in trading as the supermarkets aggressively cut meat prices.
The value meat retailer reported “good progress” in restoring sales momentum since the trading update in September when it warned of dwindling footfall and the mults ramped up the price war.
CEO Noel Collett gave store managers greater flexibility and lowered price points to improve the value perception for customers as part of the recovery strategy.
The decline in like-for-like sales slowed considerably as a result from -15.8% for the first seven weeks of the second half to -8.1% for the four weeks ended 27 November, driven by a 13% improvement in customer numbers across the same time period.
Crawshaw added it expected the rate of improvement in like-for-like sales to accelerate in December as customers stocked up for Christmas and took advantage of better value meat hampers.
“The board are confident in the actions taken so far and are encouraged by the early improvements in sales, but note the importance of this progress being maintained through the key winter and festive period to deliver full year profit expectations,” the statement said.
Collett added: “We are encouraged by the customer reaction to the changes we’ve made to the proposition and are confident sales will continue to improve through the important winter and festive period. Our store teams are set to give our customers a great Christmas which will provide the platform to further restore sales momentum in the New Year.”
Shares in Crawshaw have risen 4% today to 23.4p, but have fallen back from a 6% jump in morning trading. The stock crashed more than 40% following the September trading update.
Peel Hunt said the ‘medicine was starting to work’ at the business. “We continue to believe that the action taken will restore momentum and that the store roll-out will restart once the base business is in a steady state,” the broker added. “Importantly the returns generated from the store roll-out are still attractive, even at the current rate of sales. The second factory outlet in West Bromwich is performing as expected thus far.”