Itsu’s grocery arm is on course to pass the £50m revenue mark this year after new listings and NPD drove a £10m-plus jump in third party sales.
The grocery business of the Japanese food chain posted a 37% jump in sales in the 12 months to September 2022, to grow non-restaurant revenues to £40.1m.
Itsu said this had been driven by distribution gains, frozen growth, new listings, NPD and international growth.
In the UK, growth was boosted by the launch of its award-winning chilled Big Bao and over 300% growth in Brilliant Broth sales. Of its 18 ranges, all but two posted annual growth.
International grocery sales shot up 82%, with growth expected to continue as it launches its gyoza, bao and broths in an increasing number of major European retailers this year.
This international expansion and growth in NPD is expected to drive further double-digit grocery growth, and help sales pass the £50m mark this year.
However, the arm’s profits fell to £380k from £2.1m last year as it absorbed the costs of “preparing for successfully long-term growth”, which included the implementation of a long-term incentive plan.
Itsu Grocery finance director William McMillan told The Grocer: “2023 has continued to build on the impressive growth of 2022, with gross sales up more than 20% in the first half of the year and full year sales predicted to grow by more than £11m.
“This healthy growth is driven by both our core ranges (gyoza, bao buns and noodle cups) as well as significant NPD, with 26 brand new SKUs being listed in supermarkets over the course of the year.”
The wider Itsu group, including its restaurant empire, grew revenues by 59% to £138m as it recovered from the impact of Covid closures.
Its restaurant business showed a return to pre-Covid trading levels, with sales up 73% year-on-year to £101m. Like for like sales growth of 123% was complemented by a the opening of 15 owned shops and five franchises, it said.
Group EBITDA of £6.5m was 42% up year-on-year as the profitability of its restaurants improved markedly. Group operating losses were cut to £720k from £7.5m in 2021.
Julian Metcalfe, founder and CEO, said: “Itsu retail is back opening temples to healthier fast food – 20 mega new sites, which will offer even more affordable hot food options thanks to digital innovation, are set to open by 2024. Meanwhile grocery recipes that have been years in development are landing in supermarkets including chilled noodle’soups and crystal noodle’cups.
“It’s time for change. Healthier food should be a right for the many, not a privilege for the few – it’s what people want and need and Itsu is determined to provide.”
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