From next Monday (23 March), Tesco will stop carrying Kingsmill bread in-store or online. A spokesperson for the retailer told just-food the de-listing was "part of our regular review of our ranges to meet the needs of our customers".
The UK supermarket has previously indicated it will be cutting lower-volume SKUs across its categories in order to reduce costs. The spokesperson did not confirm whether the de-listing was part of this wider strategic drive and declined to detail how the shelf space occupied by Kingsmill bread would be allocated.
A spokesperson for Allied Bakeries, the UK bakery unit of ABF, said: "While we are disappointed by this decision regarding Kingsmill bread, we are continuing to work with Tesco to build our Allinson and Burgen bread, Kingsmill snacks and wider Kingsmill bakery portfolio, and hope in the future that we will see Kingsmill bread return to stores as a choice for Tesco shoppers."
In its most recent trading update, ABF said price competition was hitting margins at Allied Bakeries, where profit is expected to be down on last year.
When the trading update was released at the end of last month, the company said over-capacity in the industry was "driving manufacturers towards marginal pricing" at a time when retailers are "seeking to prove their value credentials" on grocery essentials such as bread. "As retailers drive for value and range simplification, already tight margins have come under further pressure and Allied Bakeries' profit will be lower than last year as a result," the group said.
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