Northern Foods slowed by contract changes

Northern Foods today said sales were lower after it pulled out of low-margin contracts and reduced promotional spending during the World Cup.

The owner of Fox’s biscuits and Goodfella’s pizza reported a 1.6% drop in like-for-like sales, although it added that trading was in line with hopes.

The fall in first quarter revenues was driven by a 25% drop in its frozen division after it axed certain contracts in order to boost margins and stopped making Birds Eye frozen pies in June of last year.

It hopes to improve the trend in frozen food with its £5m (€6m) “pizza fairy” advertising campaign to support its Goodfella’s pizza brand.

Bakery sales were down 5.6% on a like-for-like basis in the first quarter, but Northern said this was in line with expectations after it reduced promotional activity for its Fox’s biscuits brand during the World Cup.

The company has previously invested in Fox’s biscuits through a series of adverts featuring Vinnie the panda and its relaunched its Rocky bar.

In chilled foods, like-for-like sales were 14.3% higher in the 13 weeks to July 3 after sales of sandwiches and salads were boosted by strong demand in the warm weather.

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