Associated British Foods has warned of continued pressure on margins at its grocery business, where sales were flat in the past three months.
Sales of the division, which includes Allied Bakeries and the Kingsmill brand, showed no improvement compared to last year in the 14 weeks to 23 June.
For the year to date, comprising the 40 weeks to 23 June, grocery sales were up just 3%.
“Grocery remains tough,” ABF said in its latest trading statement. “The perennial out-performers – Twinings, Ovaltine, Jordans and Ryvita – continued to show strong trading in the quarter, but UK bread and George Weston Foods Australia continue to struggle in a tough consumer environment.”
It warned that “the market remained intensively competitive for Allied Bakeries, with promotional activity reducing margins”.
The company said a surge in home baking over the Jubilee weekend had contributed to good sales for its Silver Spoon sugar brand. Sales in the sugar busienss soared by 54% as volumes and price climbed in Europe.
Primark, meanwhile, continued to be a driver of growth for the company, with sales at the budget clothing business up 13% in the quarter.
Group sales were also up 13% for the quarter – and by 11% for the year to date.
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