Uniq dairy desserts take blame for disappointing 3Q sales

- Last updated on GMT

Related tags: Europe, United kingdom

Uniq, the European chilled food group, announced yesterday that
disappointing UK sales of its healthy desserts range had undermined
improved sales growth across continental Europe, Tom Armitage
reports.

The company said group sales were down by 0.6 per cent in the 13 weeks to 25 December, adding that a solid performance from its continental European operations and its recent acquisition of a dairy desserts factory in Minsterly, Shropshire, had helped offset what it called "disappointing"​ overall UK sales.

Uniq blamed the weak performance on like-for-like sales to ailing UK retailer Marks & Spencer (M&S) being lower than anticipated. M&S is currently Uniq's largest customer, selling a range of dairy desserts such as crème caramels, trifles and cheesecakes.

Below-par Christmas trading figures from M&S - which saw food sales drop by 1.7 per cent on the previous year in the six weeks to 1 January - have also affected another leading UK food manufacturer, Northern Foods, which similarly pinned disappointing Christmas trading figures to its relationship to supply M&S with own label products.

Uniq's chief executive Bill Donald commented that M&S would "inevitably"​ be conducting supplier rationalisation in an attempt to offset further sales decline.

Uniq's 3Q trading statement was brought forward to coincide with the news that the UK's biggest dairy firm Dairy Crest is to close its Yeovil factory in Somerset - leaving Uniq to pick up a lucrative £20m contract to supply leading UK multiple retailer Tesco with own label desserts.

Uniq claims that the Tesco contract alone will generate revenues of £20 million (€28.5 million) per annum, bringing it one step closer to fulfilling its long-term ambition to become the leading own label desserts business in the UK. The company has recently commenced work on extending production facilities at its dairy desserts factory in Minsterley, Shropshire, which it acquired from Northern Foods last year for a reported £16.5 million (€23.5 million).

But despite Uniq's weak trading performance in the UK, Ronald drew attention to the fact that trading across continental Europe - where an estimated 60 per cent of Uniq's turnover is generated - fared slightly better, on the back of successful new product launches.

The group conceded, however, that its trading performance across southern Europe was impacted by sluggish sales across its French healthy desserts division.

Last year Uniq was the first company to launch a healthy dairy dessert product in France - a spin-off dairy dessert product from its successful cholesterol-lowering Omega range of low fat spreads - but subsequent functional dairy product offerings from Danone and Unilever have increased competition and contributed to a decline in sales growth for Uniq's product.

Related topics: Manufacturers, Yogurt and Desserts

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