Big four supermarkets will cut small brands and back big names, says Premier Foods CEO
Premier Foods, of Mr Kipling cake fame, is about to win more shelf space in the battle of the ‘big four’ supermarkets, according to chief executive Gavin Darby.
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The larger supermarket chains will cut costs by reducing their product range, Darby suggested, giving better-known brands staying power while smaller name fall off the radar.
Talking to Reuters about Tesco, Darby said: “I am extremely interested in supporting a retailer who wants to take 20% to 40% of their product lines out because it will benefit the faster selling lines and we typically have those.”
The food retail industry has struggled over the last year and this was rejected in the company’s quarter sales, which dropped 4.6% year-on-year while shoppers increasingly switched to discounters like Aldi and Lidl.
Premier Foods slashed slow selling products in favour of its seven favourite brands. These include Mr Kipling, Bisto, Oxo, Ambrosia custard, Batchelors, Loyd Grossman and Sharwoods.
The firm acquired many assets between 2002 and 2008 but since then has had to revamp its business plan to reduce debt levels.
Darby added: “The environment will be challenging in 2015 but after 30 odd years in this industry I have rarely seen an alignment of the stars in terms of where the big retailers are going and big branded manufacturers.”