Northern Foods has claimed a decrease in its level of promotional activity dented sales volumes at its frozen division, particularly its pizza business.
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In a trading update released this morning (26 March), Northern revealed that overall sales were up 8.8% for the fourth quarter and 4.7% for the full year.
However, sales at its frozen business lagged, rising 2.5% and 2.2% in the full year and fourth quarter respectively.
While pricing initiatives increased, volumes were down 4.2% in the fourth quarter, a spokesperson for the UK food group told just-food.
“Volumes were down because, from a pricing perspective, we made the decision to run less promotions. If you do more promotions you will be shifting higher volumes,” the spokesperson said.
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By GlobalDataNorthern decided not to run as many promotions and to instead push through price increases partially to shore up margins in the face of rising costs. “Part of that would go to offset increased input costs,” the spokesperson revealed.
Looking to the future, the spokesperson said food manufacturers in general would want to rely on fewer promotions.
“Pizza as a market is pretty focused on promotions…. Going forward, we will continue promotional activity, but manufacturers will be looking to rely less on promotions,” the spokesperson said.
