Associated British Foods, which owns Allied Milling and Baking have said the UK bakery market remains intensely competitive putting pressure on their leading brand Kingsmill which is produced at their bakery in Bredbury.
Pressure on profits in the sector is intensifying as several branded and supermarket own-brand loaves have been slashed: Sainsbury’s cut the price of 800g Hovis white and wholemeal and 750g Best of Both loaves to 75p, as well as nine of its own-label loaves from 75p to 55p.
In ABF’s pre-closing statement for its interim results to 28 February 2015, the company said:
“The UK bakery market remains intensely competitive, with a combination of over-capacity in the industry driving manufacturers towards marginal pricing, and retailers seeking to prove their value credentials in essential shopping items such as bread.
“As retailers drive for value and range simplification, already tight margins have come under further pressure and Allied Bakeries’ profit will be lower than last year as a result.”
ABF’s interim results to 28 February 2015 are scheduled to be announced on 21 April.
Source: Bakery Info