UK convenience food maker Northern Foods has said Christmas trading did not meet expectations, due in part to poor trading at UK retailer Marks & Spencer.

“Sales levels overall in the Chilled Division in December were lower than expected, reflecting in particular our trading with Marks & Spencer,” the company said.

Northern Foods said underlying sales rose just 1.3% in the 13 weeks to 1 January 2005 compared to the year-ago period, while underlying sales to its five largest customers – Marks & Spencer, Tesco, Asda, Sainsbury’s and Morrisons – in the same period rose 2.3%. Underlying sales exclude the effect of disposals and acquisitions.

“As at the half-year, we continued to trade a little ahead of the equivalent 2003/4 profits. However, the more difficult Christmas trading and the continuing tough business environment mean that we now expect the profit before tax and exceptional items for the year ending 31 March 2005 will be around £80m (US$150.1m). This result compares to a 53 week period in 2003/4 of £86m,” the company said.

Northern Foods said it continued to make good progress on its short-term priorities, which include factory rationalisation, divisional restructuring and central procurement.

“Although the market place remains challenging and highly competitive, we are confident that the actions already taken and those planned will have medium and long- term benefits for the group,” Northern Foods said.