Hovis is not planning on lowering its bread prices this year, despite having increased prices by 30% after the global cost of wheat rocketed.
As energy and distribution costs have increased and some commodity prices rose five or sixfold following Russia’s invasion of Ukraine, Hovis chief executive Jon Jenkins said the British bread company had hiked prices by 15% to 30%, The Times reported.
While Jenkins explained that costs were now “relatively stable across the piece” and had lowered since their peak in 2022, however, its current prices would remain static as factors including wage inflation were “structural” and would continue to impact costs.
It comes as the bread maker saw pre-tax losses narrow to £3.6m in the 53 weeks to 30 September, following a loss of £28.6m in the 38 weeks to 24 September 2022.
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In what Jenkins described as a “bounce-back year for Hovis,” the company also returned to operating profit of £3.2m following a loss of £24.5m in the previous 38 weeks.
The company said the financial progress was delivered by “new pricing as the exceptional commodity inflation triggered by war in Ukraine was passed through to 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.”
Hovis expects performance to continue to improve over the next 18 months as it invests in its supply chain and national delivery fleet.
It has also launched as new £2m advertising campaign to reintroduce the tagline “as good as it’s always been”.
The results comes as Hovis has entered into a new, exclusive three-year brand licensing agreement with Modern Baker to create bakery products that appeal to the health-conscious consumer.
The bread giant has been working with the start-up since April 2023, focusing on the product development, manufacture and distribution of the Modern Baker Superloaf and Super Bakery franchise across the UK and Ireland.
