The maker of Mr Kipling cakes, Oxo cubes and Bisto gravy granules has said it believes recent food cost inflation has peaked, and it is not planning any more price rises for its food products for the rest of the year.
The news came as owner Premier Foods reported a 21% increase in sales in the first quarter of the financial year, compared with a year earlier.
The grocery sector has been under pressure in recent months, with food producers facing a surge in cost of ingredients and retailers trying to keep prices low to attract customers.
Sales of branded products were nearly 18% higher in the 13 weeks to 1 July, while the London-listed company said it had further grown its market share during the past quarter.
Premier Foods, which employs more than 4,000 people across 15 sites in the UK, said it expected its trading profit for the current year to be at the top end of market expectations.
However, it said sales growth in its grocery business would “moderate” across the rest of the year, as the effect of higher prices reduces.
Alex Whitehouse, the chief executive of Premier Foods, said the company was benefiting from making ingredients that shoppers can use when cooking at home, as they tighten their budgets in the cost of living crisis.
Its grocery brands, such as McDougalls, Sharwood’s and Batchelors, have been selling well, including flour, cake mixes, and pasta and curry sauces.
“Our portfolio, which helps consumers make good value and nutritious, tasty meals at home, continues to demonstrate a high level of relevance in the current, challenging economic climate,” Whitehouse said.
Premier Foods said sales of its non-branded sweet treats rose by 86% in the period, as shoppers started buying more cakes, with Mr Kipling sales boosted by new products including brownie bites.
The British maker of French fondant fancies and Bakewell slices said it continued to expand Mr Kipling in the US, where it is now sold in more than 1,400 stores and where it is planning to launch new seasonal products.
The company’s cakes are also increasing their sales in Australia, where it said it had reached a record market share of nearly 18%.
