Heinz has recorded bumper profits in the year it pulled products from Tesco shelves after a row over price rises.
Pre-tax profits jumped 9.7% to £161m in the 53 weeks ended 31 December 2022 as the group maintained gross margins at 29.8%, according to UK accounts at Companies House.
Revenues at the baked beans and ketchup maker soared by £101.8m to £899.7m, a 12.8% increase. However, volumes declined 5% as it pushed up prices to offset input cost inflation.
Overall net sales value rose 19% in the period, which the accounts mainly attributed to a 21% increase in price.
Heinz locked horns with Tesco in 2022 in a disagreement over price, with the supermarket at the time calling the requested increases “unjustifiable”. Shelves at Tesco were left empty as Heinz halted deliveries during the dispute.
A Kraft Heinz spokesman said UK results in 2022 were distorted by an extra week of trading in the financial year compared with just 52 weeks in 2021.
“This extra week allowed to us bring in more profit at a disproportionately lower cost,” the spokesman added. “If we exclude the extra week, profit after tax [£129.8m in the 53 weeks versus £122.9m in 2021] would have been flat.”
Heinz said the price increases made over the past two years had always been below inflation.
“We’ve absorbed costs where we could,” the spokesman added.
“We’re now reinvesting back into ways to offer shoppers better value – starting with new promotional activities on some of our iconic and most-loved products. These increased promotional discounts will help shoppers enjoy greater savings at the checkout. We’re also prioritising investment in our people and in our communities throughout the ongoing economic uncertainty.”
The group said it did not expect any further price increases.
While beans, soups and sauces suffered declining volumes in 2022, the foodservice business registered growth as it recovered back to pre-pandemic levels and there had been “a positive response” to new product innovations.
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