Recent accounts filed with Companies House indicate that the UK division of a major US food company achieved nearly £1bn in sales for 2023, despite a decline in volume. The company increased prices to offset rising costs.
In 2023, the London-based UK arm reported revenue of £967.1m, rising from £899.7m in 2022. However, this growth occurred alongside a 12% drop in volume, attributed primarily to the ‘elasticity impact in meals and sauces post price increases to offset the significant cost inflation of 18 per cent.’
During the latter half of 2023, the company undertook ‘extensive reinvestment in marketing and price,’ which mitigated some of the volume decline. Overall, the company’s net sales value increased by 29% compared to 2019, driven largely by price hikes to counteract a 51% cost inflation since that year.
Going forward, the company anticipates further growth in net sales in the UK through ‘volume increase from the investments in price and marketing implemented in the latter half of last year.’
Despite increasing sales, pre-tax profit fell from £161m to £104.1m in 2023. However, the company expressed optimism about future growth. A board-approved statement highlighted a ‘slight inflationary trend in main commodities, notably tomato, offset partly by a robust efficiency-driven operations plan,’ allowing the firm to maintain a flat market contribution while sustaining marketing investment levels established in 2023.
Additionally, the company increased its workforce from 415 to 473 employees over the year. The broader group reported revenues of $26.6bn (£20.3bn), a slight increase from $26.4bn (£20.1bn), and an operating income rise from $1.2bn (£916.4m) to $1.3bn (£992.8m). In May, the company revealed plans to build a £40m green-powered hydrogen plant at its Wigan facility, aiming to generate more than half of the gas it uses.
The UK arm of this major US food company has navigated substantial cost inflation by increasing prices and reinvesting in marketing. Despite a decline in volume, the firm has approached £1bn in sales for 2023 and plans further growth through strategic investments. However, pre-tax profit has decreased, pointing to ongoing challenges in balancing costs and revenue.