Fresh food company Bakkavor warned of a tough year ahead as 2022 profits slumped by 78% due to inflation, higher costs and changing consumer habits amid the cost of living crisis.
The company on Wednesday said pre-tax profit fell to £18m, despite a 10% rise in like-for-like revenue to £2.06bn. It also announced the closure of two UK sites in an effort to cut soaring costs.
“We have seen significant inflationary pressures across our cost base and on household budgets, which in turn have driven changes in consumer behaviour. We have also had to contend with supply chain disruption as global events continue to cause instability which, combined with a tight labour market, has created a difficult trading environment.”
Bakkavor said it expected the “challenging” trading environment to continue into the coming year, as consumers are impacted by the cost-of-living crisis. Inflation across the cost base is also expected to persist, particularly in energy and labour, and the firm forecast an increase in costs of around 6 – 8% in 2023.
Reporting by Frank Prenesti for Sharecast.com
