The cost of a loaf of Hovis bread is set to remain largely steady this year after prices were hiked by almost a third in the aftermath of Russia‘s invasion of Ukraine, it has been confirmed.
Chief executive Jon Jenkins told the PA news agency that Hovis prices were now “relatively stable” thanks to easing costs for the group.
The bread and bakery brand, which was founded in Stoke-on-Trent 138 years ago, increased prices by between 15 per cent and 30 per cent in the year to September 30, 2023, after seeing a five or six-fold surge in some commodity prices, while energy and distribution costs also rocketed, following the war in Ukraine.
Wheat prices were impacted in particular after Russia’s invasion in February 2022, with Ukraine having been a major global supplier.
Speaking to the news agency, Jenkins said Hovis was not expecting a “repeat of what we saw in 2022”, although he said wage costs remain a pressure.
His comments come after Hovis announced its pre-tax losses had narrowed from £28.6m to £3.6m in the 53 weeks to September 30, 2023, compared to the previous 38 weeks to September 24, 2022.
It returned to an operating profit, at £3.2m against losses of £24.5m in the 38-week prior period.
In a statement Hovis said: “This financial progress was delivered by new pricing as the exceptional commodity inflation triggered by war in Ukraine was passed through to its customers.
“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.”
The group introduced automation across some of its sites as part of cost-cutting efforts, which saw 15 roles impacted at its operation in Belfast.
But Hovis, which employed 2,908 workers in 2022-23, said it was able to redeploy all staff affected by the move.
Hovis was bought by private equity firm Endless in November 2020 from joint venture owners Gores Group and Mr Kipling firm Premier Foods.
The deal followed a major turnaround at Hovis, which sold the majority of its milling business in 2018 to focus on baking operations.
Jenkins said there were “no immediate plans” for Endless to put Hovis up for sale.
“My expectation is that we are going to be working with Endless for a few more years,” he added.
