‘Lumpy’ price rises on way, warns Hovis-maker Premier

Having already endured 10%-plus rises in the cost of food ingredients in the past year, chief executive Robert Schofield said: "We have not seen the harvest yet, but we're anticipating prices rising by a further 6% or 7% in the coming year. That may be less than the previous 12 months' double-digit growth but is still a long way higher than anyone would like to see."

He added that price rises would be "lumpy", pointing out that Premier was still facing double-digit-rises in the cost of tin plate used for canning its products.

In the past 12 months, Premier has upped the prices of its goods to supermarkets and other grocery stores by between 5% and 7%.

The company today announced a major relaunch of its Hovis brand, with the re-introduction after more than 10 years of the "little brown loaf" — the half-size 400 gram brown loaf with the "Hovis" name in the side that was introduced by the famous breadmaker 122 years ago but scrapped by previous owner RHM.

It is also launching a 200g white loaf, both aimed at the trend of smaller families who do not get through a large bloomer before it goes stale.
"These launch in stores in the next two weeks and we're pushing it with the biggest ad campaign I've ever done," said Schofield. TV ads will be shown in the prime Coronation Street slot.

He added: "It's worth pointing out that despite the fact that bread prices are up 20%, sales volumes are up 3% in the year. We think it is because people are feeling the pinch and making their own sandwiches to take in to work rather than going to the café at lunchtime."

Hovis and other brands such as AB Foods' Kingsmill have come under pressure from massive growth from privately-owned Warburton in recent years but Schofield said Hovis's market share was stabilising at around 23%.

Operating profits in the six months to 28 June were up 10% at £47.8 million on sales of £1.29 billion against £899 million a year earlier.