Shoppers are still trading down in the cake fixtures, although they have been prepared to splash out on bread and gluten-free, according to Finsbury Food Group.
The baker, which posted a 4.1% drop in group sales to £168.3m in the year to June 30, said revenues in its cake division slumped 9.7% compared with the previous year.
Chief executive John Duffy said: “Trading continued to be affected by consumers seeking better value through trading down and more frequently choosing products on promotion.
“In addition to our decision to exit specific low margin business coupled with our bias towards premium and healthier cakes, which have been particularly affected, the overall cake market also declined.”
However, some branded cake sales had bucked this trend with Thorntons cake sales up 5.2% year-on-year, he said.
Bread and free-from
Lacklustre cake sales were offset by strong growth in bread and free-from products, which were up by 9.3%, said Duffy.
“Underpinning this growth was the successful national roll out of the Genius [gluten-free fresh bread] brand. The prior year’s acquisition of Goswells speciality breads, including the Vogel brand, drove growth to 16.5% including the acquisition.”