Bakkavor trading 'ahead of 2019' except for salads

By Rod Addy

- Last updated on GMT

Bakkavor's salad sales were still behind 2019 levels, but a recovery in food-to-go still drove a strong sales performance
Bakkavor's salad sales were still behind 2019 levels, but a recovery in food-to-go still drove a strong sales performance

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Bakkavor, the fresh prepared food manufacturer, has reported second quarter trading ahead of 2019, although sales of salads had been hit by COVID-19 restrictions and mixed weather.

The group noted strong sales momentum as COVID-19 restrictions eased, delivering growth on the comparative period in 2020, which was heavily impacted by lockdown measures, and on the equivalent period in 2019.

"In the UK, sales in the first quarter were adversely impacted by lockdown restrictions, however early signs of recovery became apparent in March as government restrictions began to ease," the business stated. "We have since seen this improvement in sales gather pace throughout the second quarter as lockdown measures were eased further, and the frequency of shopping visits returned to pre-COVID-19 levels.

"As a result of more normalised shopping habits, we have seen meals, pizza & bread and desserts return to pre-pandemic levels. Salads delivered a strong year-on-year performance driven by recovery in food-to-go, however this remained behind 2019 levels as a result of the continuation of government guidance to work from home, and mixed weather in the quarter."

The numbers

In the 13 weeks to 26 June 2021, Bakkavor's UK like-for-like sales increased 12% compared to the same period in 2020, and were down only 1.4% compared to 2019.

Group reported revenues were up 13% compared to the second quarter in 2020 and 16.1% higher on a like-for-like basis, and 0.7% and 1.8% higher, respectively, than the equivalent period in 2019. Overall, group reported revenues for the half-year were up 4% compared to the first half of 2020.

Strong growth continued in the US and China as both markets recovered from the pandemic's impact. Commenting on the US, Bakkavor stated: "We continue to see demand for fresh prepared meal solutions grow significantly and will invest to increase capacity across our existing footprint in the second half of the year to accommodate this growth."

Referring to China, it added: "We completed the transition of business to our new replacement site in Wuhan in April and our new site in Xi’an will be operational by the end of the year, as we build out our capacity to meet strong market demand for fresh, healthy and convenient food."

Bakkavor said its main operational focus would be on labour recruitment, retention, and planning, to keep pace with increased demand. However, it added: "Across our industry, the labour market is increasingly challenging as shortages persist, particularly in the UK and US. Mitigating actions are already underway, and we will continue to monitor the ongoing situation and adapt our approach accordingly."

Bakkavor chief executive officer Agust Gudmundsson, said: “We are pleased to see improving trends across all of our businesses as lockdown measures have eased, with group sales for the quarter ahead of 2019. We are also encouraged by the return to pre-pandemic levels of shopping visit frequency, a key driver for our fresh prepared food offering."

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