It was a combination of a large number of factors: massive debt due to previous acquisitions being funded just as the financial bubble burst and borrowing money became really expensive ; under-investment in old factories keeping costs high ; costs of restructuring the business as older / non-strategic products were sold off ; huge pension deficits ; a rights issue ; poor sales due to adverse weather conditions (yes, really), big 4 retailer challenges and the rise of the bulk discounters ; poor senior management driving an ineffectual strategy ; the list goes on.
However, there's virtually a whole new Board in place, the strategy seems to be more focussed (albeit still under the influence of 'adverse' weather - bad weather = good sales), debt is under control for years to come, the pension payments are under control and there's apparently some great NPD in the pipeline to improve the product portfolio. The internecine struggle between the retailers will continue to cause major issues for all food manufacturers for some time to come - but at least those factors that can be fully controlled from within the business do seem to be getting sorted slowly but surely.
A good number of years ago now, when I worked as a salesman for a multinational food company we would regularly look to do cheap deals of normal food products. To 1) get rid of large amounts of stock that would be either going on to a short live Because sales had slowed down and we would not be able to clear that stock before it went out of date. 2) To clear stock that was planned for a normal customer but that line was delisted or dropped, so we needed to clear stock This was always beneficial to both parties although it did mean from time to time that there was a low rsp on the shelves for a time. I wouldn’t be surprised if that still goes on, nothing to worry about in the short term.
They Tend to also get the suppliers products with the shortest best before date that large supermarkets wont accept. That is also why they can sell them cheaper. So effectively shoppers at these kind of stores are not getting the best of the product .... not saying that goes for all the products in these stores but certainly goes for the largest uk food manufacturer I deliver for
2reincarnated: The jars at 75p sold in heron foods are smaller than the versions sold in the large super markets and use less expensive ingredients. These are 450g, normal ones are 500g and have better ingredients. Not sure it is wise to mess around with brands like this, danger is to devalue brand image.
Even the fussiest eaters love homepride .... shame on me having never bought their pasta bake sauce till the other half came home with one today, and hearing my fussy youngest saying yum whilst wolfing it down ( no word of a lie ) . You can be certain that there will be a permanent place in my cupboard for them from now on. ;o)
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