Premier squeezed by higher bread cost

Hovis bread maker Premier Foods said today it was on course to hit annual profit targets – despite a slump in bakery sales.

The Branston pickle to Hartley’s jam firm reported a 3% rise in like-for-like group sales for the four months to October 31, and expects further sales growth in the run up to Christmas.

However, profitability at its bakery division has fallen after the firm raised bread prices twice since September. Competitors have taken market share after they delayed similar price rises to offset higher wheat costs.

Premier said: “We are pleased to have achieved further bread prices increases to offset higher wheat costs but we anticipate that our bread volumes will continue to be affected whilst a disparity in retail prices between the main bread brands remains.”

Since suffering an “unprecedented” rise in grain costs, Premier has cut jobs at a bakery in Bradford and a distribution depot in Telford.