Parfetts’ profits dropped by 61% last year as the business invested heavily into protecting retailer margins.
According to newly filed Companies House results, the wholesaler made a £5.7m pre-tax profit in the year ended June 2022, down from £14.7m in the previous year.
Parfetts said the results represented a return to historic margin levels after a drop in promotional activity during the pandemic due to increased demand.
The decreased profits came despite a 6% increase in turnover from £570m to £605m.
“Through Covid and into 2022, Parfetts, like the rest of the industry, tackled supply shortages,” said Parfetts joint MD Guy Swindell. “We prioritised availability and maintained a promotional calendar to support our retailers.
“Consumer demand for convenience stores increased through the pandemic and drove higher margins for retailers and wholesalers alike.
“As normal trading conditions have returned, Parfetts has again focused on margin for our customers, and suppliers are supporting this at normal levels.
“We pass on supplier promotions and often reduce our margin to support our customers; hence our margin has returned to normal levels. We continue to do all we can to help retailers tackle the rising cost of business.”
The business also invested £1m into the refurbishment of its estate in 2022, including substantial improvements to its Middlesbrough depot.
In addition, cost of doing business increased significantly by 7.5% from £523m to £563m, largely to the increased sales.
However, payroll costs also increased from £24m to £26m, and card transaction costs rose from £1.5m to £2.3m.
It comes as the business signalled its intent to expand nationally with the opening of its new Birmingham depot last month.
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