Northern Foods said third quarter sales to the end of December have been hit by difficult trading in biscuits where sales were 6% lower than last year.

Total sales fell 2.9%, the same fall as seen in the previous six months to September 30, while underlying retail sales in the final quarter increased 2.5% down from 3.5% in the last six months.

Sales to its five largest customers Marks and Spencer, Tesco, Sainsbury, Asda and Safeway were flat compared to 1% rise to September 30. Like-for-like sales fell to 3.5% in the quarter from 6%.

The fall in sales reflects disposals over the past year of the Ski and Munch Bunch brands in April 2002.

Northern Foods said biscuit margins were expected to remain under pressure in the final quarter, and price increases would be necessary to recover rises in chocolate input costs, the group said.

The group said its convenience store business is expected to see "robust" trading in the final quarter after performing satisfactorily in the third.