British food manufacturer Premier Foods blames Aldi and Lidl for its drop in sales, after the company reported it had suffered an almost 5 percent drop in third-quarter sales.
After a 4.7 percent drop in sales from the makers of Oxo cubes and Bisto gravy, Premier Foods' Aldi and Lidl relations don't seem to be at their best point. According to UK newspaper The Guardian, the food manufacturers blame the two German-based discount supermarket chains for changing the way things were working in the country's grocery world.
It seems Premier Foods' Aldi and Lidl problems aren't the only ones the two German companies are facing, since they've received a lot of backlash since the ascent of the two discounters, because it has also meant leaving the UK's four main grocers have been "hammered" by them, according to website ThisIsTheMoney. The site also adds that shares for Premier Foods fell nearly 15 per cent to finish 5p lower at 29.25p, wiping £33.5m off the value of the company.
The makers of Mr. Kipling cakes are sure that for Premier Foods, Aldi and Lidl have been the leading cause for their current problem, as they've caused some radical restructuring in the company: they've raised £353 million, have re-financed their debt, partnered up with Hovis and even vamped up their management team.
However, Premier Foods share have continued to drop by nearly three quarters.
The Financial Times seems to agree with Premier Foods' Aldi and Lidl concerns, making an example of Premier Foods by going through an analysis of the relation between the drop in sales in the company, saying that Premier Foods' shares have actually lost over 70 percent of their value in the past year, forcing the company to sell some of its "historically well-known but lesser brands," such as Bird's Custard and Paxo stuffing, in the discount stores that have been giving the company nightmares in the last few quarters.
