The maker of Mr Kipling cakes, Oxo cubes and Bisto sauce granules has said it believes recent food cost inflation has peaked and it plans no further price increases for its food products during the rest of the year.
The news came as the owner, Premier Foods, reported a 21% increase in sales in the first quarter of the fiscal year, compared to the previous year.
The grocery store sector has been under pressure in recent months, with food producers facing rising ingredient costs and retailers trying to keep prices low to attract customers.
Sales of branded goods rose nearly 18% in the 13 weeks to July 1, as the London-listed company said it had further increased its market share over the past quarter.
Premier Foods, which employs more than 4,000 people at 15 UK sites, said it expected its trading profit for the current year to be at the higher end of market expectations.
However, it said sales growth in its grocery business would “moderate” for the rest of the year as the effect of higher prices abates.
Alex Whitehouse, chief executive of Premier Foods, said the company was profiting from making ingredients shoppers can use when cooking at home as they tighten their budgets in the cost-of-living crisis.
Its grocery brands, such as McDougalls, Sharwood’s and Batchelors, have been selling well, including flours, cake mixes, and pasta and curry sauces.
“Our portfolio, which helps consumers prepare affordable, nutritious and tasty meals at home, continues to demonstrate a high level of relevance in today’s challenging economic climate,” said Whitehouse.
Premier Foods said sales of its non-branded confections rose 86% in the period as shoppers started buying more cakes, with Kipling’s sales boosted by new products including brownie bites.
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British maker of French fondant fantasies and slices Bakewell said it has continued to expand Mr Kipling in the US, where it is now sold in more than 1,400 stores and where it plans to launch new seasonal products.
The company’s cakes are also increasing sales in Australia, where it said it had achieved a record market share of almost 18%.