Unveiling full-year results this week, the food producer added that the company-wide review had caused pre-tax profit after goodwill and exceptional items to fall from £75.4m last year to £4.3m on sales up 2% to £1.4bn, 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. The group will continue to reduce costs in its supply chain this year and focus on driving sales growth.
Earlier this year Northern Foods asked its suppliers for a 5% price reduction on goods and services from all orders placed after June 1 (The Grocer, April 16, p10).
“We will use our scale as one of the largest purchasers of food ingredients in the UK to achieve better terms and improve our overall supply chain efficiency,” said O’Driscoll.
Pre-tax profit before goodwill and exceptional items was down 6.7% to £80.2m.