Tiger Brands, South Africa's largest food producer, said on Thursday it was reviewing its spending and the number of brands it sold after revenue fell in the four months to the end of January as inflation reduced consumer spending. Announced.
It also said operating profit was flat and down for the six months ended March 31, and Black Friday sales and promotional activity in the December period were lower than expected.
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The owner of Jungle Oats and Tastic Rice said the group's revenue for the four months to January 31 was down 1% year-on-year due to lower volumes across most sectors., 8%, offset by a 7% increase in prices.
After Russia's invasion of Ukraine exacerbated pandemic-related supply chain disruptions, global consumer goods manufacturers raised prices to cope with soaring costs for nearly all raw materials, energy and packaging.
Citing South African statistics, Tiger Brands said food and non-alcoholic beverage inflation has risen faster than the consumer price index, with prices for essentials such as sugar, vegetables, meat, eggs and rice soaring by nearly 20%. He said he is doing so.
Tiger Brands said, “Despite the volume regression and associated revenue weakness during the period, the impact on gross margin was offset by the benefits of improved factory efficiency and price realization.”
But at the same time, it said a detailed capital allocation framework review and portfolio rationalization work is underway, with further updates expected later this year.
The company is trimming its portfolio to reduce complexity by reducing its “stock-keeping units” (SKUs), which refer to the variety of products it sells, and that it has “over time improved manufacturing and sourcing efficiencies.” It will improve.”
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“It is important to direct resources, both financial and human capital, to the business segments that generate or have the potential to generate the highest returns,” the food producer added.
On Wednesday, Tiger Brands announced a new operating model, simplifying its organizational structure into six divisions and appointing new managing directors to head each division.
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