ABF has said that it will increase the costs of its groceries amid inflationary pressures.
The group, which owns a grocery, sugar, agriculture and ingredients businesses as well as the retailer Primark, has said the rising costs are impacting profits.
“In our Grocery, Sugar, Ingredients and Agriculture businesses we have seen an escalation in the cost of energy, logistics and commodities,” said ABF in a statement.
“We have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases. We expect an increase in the adjusted operating profit for Sugar. We expect reduced adjusted operating profit margins in Grocery and Ingredients at the half year, due to phasing in fully recovering cost but a recovery in the run rate of these margins by the financial year end.”
In Primark, sales are still lower than they were before the pandemic. ABF is proposing to cut 400 roles to simplify management at the store.
“The effect of inflationary pressure on raw materials and supply chain in this first quarter has been broadly mitigated by a favourable US dollar exchange rate compared to last year and a reduction in store operating costs and overheads.”
“We are proposing to simplify our in-store UK retail management structure as part of our ongoing programme to improve the efficiency of our store retail operations.”
