Hovis is not going to lower its bread prices this year after raising them by up to 30 per cent in response to a global surge in the cost of wheat, a senior executive of the bread maker has said.
Jon Jenkins, chief executive of the 138-year-old bread maker, told The Times that the group had increased its prices by 15 per cent to 30 per cent after a five or sixfold rise in some commodity prices after Russia’s invasion of Ukraine. Energy and distribution costs also had surged, he said.
Jenkins said that costs had come down from their peak in 2022 and were “relatively stable across the piece”, but he said the company would hold firm on its prices as some increases, such as wage inflation, were “structural” and would continue to affect its costs.
“This financial progress was delivered by new pricing as the exceptional commodity inflation triggered by war in Ukraine was passed through to its customers,” the company said. “Operating improvements and cost savings were also made to drive a step-up in overall efficiency and customer service, critical components of running a national bakery business.”
Hovi became part of Rank Hovis McDougall, which was bought by Premier Foods in 2007. In 2020 it was sold to Endless, a private equity firm that previously had owned Antler luggage and Crown Paints, which valued the brand at between £70 million and £80 million.
The British bread company enjoyed a surge in sales during the pandemic as shoppers stocked up on groceries while spending more time at home, but since then it has been affected by cost pressures compounded by global volatility in wheat, ingredients and utility costs.
Jenkins added that this was “a bounce-back year for Hovis” and it expected its performance to continue to improve over the next 18 months. He said that having got the group on a firmer financial footing, it was investing to boost its profile, with a new £2 million advertising campaign beginning this week.
Hovis is also said to be investing in its supply chain and upgrading its national delivery fleet, while it is expanding a service under which it carries other bakery products to stores on behalf of its supermarket customers.
