The maker of Mr Kipling cakes, Angel Delight and Bisto gravy granules has announced price cuts on some of its ranges on the back of a fall in the rate of inflation on associated production costs.
Premier Foods said products including Batchelors Super Noodles and Mr Kipling Slices have had their prices reduced to levels seen last summer, and added that it intended to unveil more reductions in the coming months.
“We know how challenging the past year has been for many consumers and so it’s good to see the rate of input cost inflation falling,” said Alex Whitehouse, the chief executive at the company, which also makes Ambrosia creamed rice and custard, and Oxo cubes.
“This has now given us the opportunity to lower promotional prices across a number of our major branded products such as Batchelors Super Noodles and Mr Kipling Slices.”
Manufacturers have been raising prices over the past couple of years to keep up with steep increases in supply chain, energy and labour costs.
Food prices last month were 30% higher than they were two years earlier, according to the latest Office for National Statistics data released on Wednesday that showed a drop in the overall annual rate of inflation to 4.6%.
Premier Foods moved to upgrade its annual profit forecast for the second time in 2023 after the strong performance in the first half of its financial year to the end of September, and a “good start” to its third quarter.
The company, which reported a 21% increase in adjusted profits before tax of £56.9m in its first half, said that it expected full-year trading profits to be 10% ahead of last year’s £157.5m.
Premier Foods increased its revenues by 19% to £484m as shoppers began to increase the size of their shopping baskets.
Susannah Streeter, the head of money and markets at the analysts Hargreaves Lansdown, said: “Exceedingly good prices appear to have enticed shoppers to Premier Foods’ larder of brands, such as Mr Kipling cakes, as the manufacturer passed on lower costs of ingredients to its customers.
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“Its promotional prices have been lowered across a stack of its brands, including Batchelors Super Noodles. Shoppers, who’ve been battling painful grocery price rises for so long, seized the opportunity to buy favourite products at cheaper prices.”
The company, which in July said it believed food cost inflation had reached its peak, promised more price cuts to come.
“In the second half of the [financial] year, the group’s promotional pricing will be sharper, reflecting lower levels of input cost inflation and which will assist in driving further volume recovery,” Whitehouse said.
