MR Kipling owner Premier Foods today warned its Hovis brand will lose market share in the current quarter as rivals step up promotional activity.
While Hovis boosted share in value terms to 25.6% during the first three months of 2010, this trend is under pressure due to competition in a market that includes Warburton’s and Kingsmill, owned by Associated British Foods.
Premier said it expected a fightback by Hovis in the second half of 2010 as a result of its own marketing and promotional activity, backed by the recent conversion of the entire Hovis range to 100% British wheat.
Elsewhere in the business, Premier said trading conditions were difficult due to "elevated" levels of promotional activity across its markets.
Sales volumes of branded ranges improved 2.2% in the quarter, but the ongoing focus on price meant the figure in value terms was down 0.3%.
This was despite the company’s portfolio of key brands, such as Mr Kipling, Ambrosia and Sharwood’s cooking sauces, achieving growth of 3.4% by value and a 6.6% increase in sales by volume.
Non-branded sales were sharply lower due to promotional activity and lower flour prices, Premier added.