News

August 01, 2008

Finsbury Foods Fights Off Any Recessionary Impact With Quality And Service

By Charles Wyatt

Dave Brooks, chief executive of AIM listed Finsbury Food Group, did not hold back from warning of difficult times ahead when he gave a trading update at the beginning of July. “The next twelve to eighteen months will see a rough trading environment,” he said, but struck a positive note when going on to affirm that “such conditions also contain significant opportunities for the best businesses to seek out and thrive.” No one can forecast how recessionary conditions will affect sales of cakes, bread, and gluten free bakery products, but it is the upward pressure from commodity prices that is hard to assimilate, particularly when retailers are not to keen to budge on what they will pay.

That is the key. Supermarkets live off the theory that they sell cheap goods. The general view is that they are happy to squeeze UK livestock, dairy fruit and vegetable and  chicken farmers despite rising feed and fuel prices, but with cakes it seems to be different. World prices of wheat, dairy products, eggs and sugar have risen by anything up to 50 per cent over the past year. That is what cakes are made out of  and these commodities probably account for up to 30 per cent of ...