The market will become tougher this year, Pat O’Driscoll, chief executive of Northern Foods has revealed.

In full year results to end April 2, O'Driscoll said that sales growth was likely to be affected by more cautious consumer sentiment.

Retailers, she added, would have to compete harder for market share gains.

The group unveiled a 2% increase in continuing sales to £1.4bn for the period, buoyed by strong growth at Tesco and Asda.

Ambient and chilled sales were up 7.5% and 2% but frozen sales fell 2.2% mainly due to business losses resulting from Morrisons acquisition of Safeway.

Trading for the first seven weeks of 2005 had been in line with expectations.

Peter Blackburn, chairman of Northern Foods, said that a new management team, simplified business structure and factory reorganisation implemented by the group last year would provide “a sound platform from which to move forward”.

The factory closures and group reorganisation cost £45.3m in exceptional items but were in line with expectation, he added.