Premier Foods, the maker of Mr. Kipling cakes and OXO cubes, said today it will raise prices for its products as part of plans to tackle rising wheat, dairy and fuel costs.
This comes after the company reported an annual profit that beat its forecast.
The group, which also increased dividends by 20% after its Mr. Kipling brand enjoyed its best year ever, said it was gaining market share as consumers seek well-priced meal solutions amid Britain’s cost of living crisis.
Premier Foods sells a variety of products, from plain flour to cakes and cooking sauces to fast foods, through supermarkets, convenience and discount stores, as well as other channels, primarily in the United Kingdom.
The outlook for the grocery sector has been affected by the cost of living crisis in Britain and supply disruptions from the war in Ukraine.
Large supermarket groups including Tesco and Sainsbury’s have warned of lower profits this year.
Although Premier Foods has no direct exposure to Russia or Ukraine, it said it would be affected by rising commodity prices such as wheat and dairy, as well as rising energy prices and a slowdown in the UK economy.
British inflation jumped last month to its highest annual rate since 1982, increasing pressure on the government to increase aid to households facing worsening living standards.
The company also owns brands such as Bisto and Ambrosia, and distributes Nissin’s Cup Noodles and Cadbury cakes.
It reported a main trading profit of £148.3m for the year ended April 2, above its forecast of at least £145m.
Separately, a report by consulting firm McKinsey said on Monday that British consumers are reacting to the crisis by shifting from branded to lower-priced private label products and from supermarkets to discounters.