Rivals’ baked snacks and popcorn have taken a bite out of revenues at Walkers as shopper tastes shift away from crisps towards ‘healthier’ on-the-go products.
The PepsiCo-owned crisps maker recorded a 1% drop in turnover to £272.2m, despite managing to increase prices, as volumes fell away, accounts filed by Walkers Snack Foods for the year ended 26 December 2015 showed.
Operating profits climbed 26% to £23.5m as a result of productivity initiatives, pricing increases and not having to make any pension deficit payments - which had reduced the bottom line in previous years. But launches of baked snacks by Mondelez and UB under the Ritz and Jacob’s brands put pressure on its fried snacks.
Booming popcorn sales and an explosion of brands (Propercorn, Metcalfe’s, Butterkist, Tyrrells and more) added further competition and prompted PepsiCo to make a late entry to the category with Pop Works.
Walkers is hoping its new Tear ‘n’ Share NPD can offset plummeting retail sales of the core Walkers range, Deep Ridged, Extra Crunchy and Pops, which led to a 6% drop in value for the business to £599.3m according to The Grocer’s 2016 list of Britain’s Biggest Grocery Brands.
Separately filed accounts for its sales and marketing arm, Walkers Snacks, show revenues dropped 2.2% to £151.6m in 2015 as services to fellow group companies fell. Turnover at Walkers Snacks (Distribution) also dropped, by 6% to £109.8m, driven by pricing changes for warehousing and distribution.
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