The trend among shoppers to switch to cheaper non-branded products as household budgets come under mounting pressure has been underlined by a 9% leap in sales of own-label groceries produced by food group Premier Foods over the last three months.
At the same time sales of Premier’s branded products – which include Mr Kipling cakes, Ambrosia rice puddings and Bisto gravy – slumped by nearly 8%.
Overall sales of branded and own-label foods were down by 3.1% .
In the desserts business, sales of branded products climbed 1.4% – but sales of non-branded products (puddings produced for supermarkets’ own-label ranges) surged by nearly 18%.
Brits are increasingly opting for supermarkets’ own-label products as they try to manage the impact of rising inflation and falling real wages on family finances. Recent research by Kantar Worldpanel showed that supermarkets’ own-label sales rose 6% year on year, while branded products edged up only 0.6%.
As households feel the squeeze, shoppers are seekingbetter value for money by heading to discount chains and buying budget basics.
Premier said retailers are also cutting back on promotions, and it blamed the warm June weather for slowing sales of cooking sauces, flavourings and seasonings.
The company has also been hit by rising costs linked to the fall in the pound since the Brexit vote.
Premier stuck to its forecasts for the full year, saying it would return to sales growth in the second quarter and post flat sales for the first half.
Chief executive Gavin Darby is under pressure to improve the firm’s performance after rejecting a £1.5bn takeover offer from US rival McCormick last year. This week McCormick agreed to buyer Reckitt Benckiser’s food business for $4.2bn (£3.2bn).
Premier shares rose by 2.6% to 39.75p. McCormick offered to pay 65p a share for the company in April 2016.
