JOHANNESBURG - Pioneer Foods said on Friday its turnover increased by 7.8 percent in the four months to 31 January, primarily driven by price inflation in bread, wheat flour, rice, export fruit and sound volume growth in these products and breakfast cereals in the UK.
The owner of brand names such as Weet-Bix, Liqui-Fruit, Ceres, Sasko, Safari, Spekko, and White Star said the overall like-for-like volume growth was two percent, excluding the contribution of the acquired businesses Wellington and Lizi, implying basket inflation of 5.8 percent.
Pioneer Foods said the positive contribution from turnover growth was, however, negated by major cost inflation in key raw material pricing and other operational input costs.
In a trading statement, the food group said consumer demand remained under pressure, with spending muted and not expected to improve in the near future.
As a result, pressure on gross and operating margins would continue, to the extent that price recovery lagged.