Associated British Foods (ABF) has reported a 1 per cent increase in grocery revenue for the 16 weeks ending January 4, 2025, attributing the growth to strong performances from its international brands, Twinings and Ovaltine, despite declines in certain UK and US-focused brands.
Twinings experienced solid volume growth, driven by ongoing marketing investment and strong in-store visibility. Ovaltine also delivered positive results, with sales increasing in key markets such as China and Africa. Additionally, ABF’s balsamic vinegar business performed well, with revenue growth across both European and US markets, the group said in a trading update on Thursday.
However, ABF’s regionally focused grocery businesses presented a mixed picture. While US brands performed in line with expectations, the segment faced headwinds due to the normalisation of consumer oils sales.
The UK grocery division recorded an overall decline, which ABF attributed to lower volumes and reduced sales at Allied Bakeries. In contrast, ABF’s Australia and New Zealand operations showed signs of recovery, supported by the recent acquisition of The Artisanal Group.
ABF's retail arm, Primark, reported a 2 per cent increase in sales, driven by strong growth in Spain, Portugal, France, Italy, Central and Eastern Europe, and the US.
However, the UK and Ireland, which accounted for approximately 45 per cent of sales, saw a 4 per cent sales decline, with like-for-like sales falling 6 per cent. ABF said “cautious consumer sentiment and a lack of seasonal purchasing catalyst given the mild autumn weather” led to the weak trading.
Despite these challenges, Primark experienced a boost in Christmas trading and continues its expansion efforts in Europe and the US.
ABF’s Ingredients segment reported a 4 per cent increase in revenue, but the sugar and agriculture divisions saw a 2 and 4 per cent decline in sales, respectively.
Overall group sales rose 0.5 per cent during the period.
Looking ahead, ABF expects low-single-digit sales growth for Primark in 2025, supported by its store rollout programme in key growth markets. The company remains confident in its long-term growth strategy across all business segments, maintaining its previously issued guidance.
