Food company shares drop due to reduced consumer interest in gravy and soup amid extreme heatwave conditions
## Premier Foods Navigates Challenges Amidst Warm Weather and Economic Uncertainty
In the face of a challenging environment marked by warmer weather and economic uncertainty, Premier Foods reported a 0.3% increase in sales for the quarter ending 28 June 2025, totalling £240million at constant currency. Despite a 2% decline in Grocery branded sales due to the warmer weather impacting categories like gravy, stock, and soup, the company managed to grow volume and value market share overall [1].
The company's focus on innovation and expansion into new categories has been a key strategy to offset these declines. Sales across the Sweet Treats arm saw a significant boost of 11%, driven by strong innovation and new product launches such as Mr Kipling birthday cake tarts. New categories sales also increased by 38%, with brands like Ambrosia Porridge pots and Cape Herb & Spice contributing to this growth [1].
Acquired brands like The Spice Tailor and FUEL10K have also experienced double-digit UK sales growth, further supporting Premier Foods' expansion strategies. The company plans to introduce new products such as FUEL10K yoghurt and granola pots to continue driving branded revenue growth [1].
Overseas revenue rose by 5% at constant currency, with 'good sales growth' in Australia. However, sales of non-branded grocery products fell 8.8% due to consumers switching brands and Premier's decision to exit some lower margin contracts [1].
Premier Foods' profit expectations for the full year remain unchanged, underpinned by its proven branded growth model and ongoing cost efficiency programs. Analysts expect full-year earnings of £195million for Premier Foods [2].
The company's shares fell by 4.14% on Thursday, possibly due to the mixed results reported during the quarter. Despite this, Premier Foods remains optimistic about the future, with the second half of the year set to see an acceleration in new product development launches, including FUEL10K yoghurt and granola pots [3].
Sources: [1] Premier Foods Q1 Trading Update, 2025 [2] City A.M., "Premier Foods shares fall as it reports 0.3% sales growth", 2025 [3] The Grocer, "Premier Foods Q1 sales up 0.3% despite impact of warmer weather", 2025
In the midst of a challenging business environment with warmer weather and economic uncertainty, Premier Foods, a notable player in finance and business, showcased resilience by growing volume and value market share through innovation and expansion into new categories, such as Ambrosia Porridge pots and FUEL10K, even as traditional categories like stocks witnessed a decline. Amidst these mixed results, the company is set to continue investing in new product launches, like FUEL10K yoghurt and granola pots, to drive future growth.
