Weetabix suffers soggy sales as discounters rule
Weetabix has suffered “the most challenging year faced by the company in a generation” amid shifting breakfast and shopping habits.
The cereal maker, owned by the Chinese government company Bright Food, said its sales were down partly because of the growth of discount supermarkets such as Aldi and Lidl at the expense of the traditional giants.
In its annual accounts, Weetabix said the rise of the discounters had contributed to falling sales volumes via traditional channels across the industry. Overall volumes held up is discounters were included, the company said, but at lower prices.
It meant Weetabix’s total turnover in 2014 was £352m, down 4pc on the previous year. Profit before tax was £109m, down nearly 7pc.
The directors of Weetabix said: “2014 was a year of significant upheaval in the UK cereal market. This made life very difficult for us as a business.”
The company said the shift in away from the big weekly shop had also “disadvantaged our historical business model”, but that it was pleased with its performance against the challenges.
Weetabix remained Britain’s most popular cereal brand, with a total market share of 14.5pc, up slightly year-on-year.
The company’s other cereals and snacks had a more difficult year. Alpen porridge and Ready Brek both lost market share in what was anyway a“relatively subdued hot cereal segment”, for instance.
As well as facing new shopping habits, Weetabix said it was attempting to adjust to shifting demands at breakfast. The company said fewer consumers had time for a “formal breakfast” and that more were looking for on-the-go options.
“This has not been a focus of the company historically and it has therefore required a change in emphasis in our innovation programmes,” Weetabix said.
The company has invested in new breakfast bars and biscuits, but not all have succeeded. It cut back its participation on the breakfast biscuits market after identifying a slowdown and “general over-supply of product”.