Finnish food group Raisio has withdrawn its full-year guidance following a first half awash with 'rapid and partially unexpected changes', the company has said.
Notably, in its key market of the UK, the inability of over-65s to visit supermarkets during the coronavirus lockdown impacted sales of its core Benecol product.
Nearly half of all Benecol shoppers fall into this age group, it added.
Sales Performance
Net sales for the first half totalled €114.6 million, which was up 1.8% on the same period the previous year, however second-quarter sales were down 4.5%.
In addition, while EBIT for the first half was up 11.5%, second quarter EBIT slumped 4.1%.
According to president and CEO Pekka Kuusniemi, the period saw fluctuations in demand and sales performance, largely driven by consumer reaction to the COVID-19 crisis.
"The extreme panic buying in response to the pandemic that took hold in March caused a sudden peak in demand, which continued for a number of weeks," he said.
"The demand focused particularly on foods that store well, of which Raisio’s portfolio includes quite a few. During the second quarter, the demand evened out quickly and there was a notable fluctuation between months, both in terms of volume and the different markets."
Channel Disruption
In Finland, the closure of the foodservice channel impacted demand for its on-the-go products, including Elovena snack biscuits and drinks, however the retail channel was largely unaffected.
In the UK, as well as reduced access to older shoppers, the company saw a decline in shopping frequency and consumption.
'Furthermore, during the lockdown period, the demand shifted from the large markets to smaller local shops, where the distribution range of our products is not as extensive,' it said.
Poland, too saw sales impacted by the closure of large markets during the spring, which in turn limited accessibility to Benecol products.
The group's Healthy Food segment posted net sales of €68.9 million in the first half of the year, on a par with the previous year, while EBIT in this division rose to €9.3 million.
Its Healthy Ingredients division, meanwhile saw net sales total €59.9 million in the period, while EBIT was €5.9 million.
Full-Year Guidance
The company said that it was withdrawing its outlook due to the potential for a second wave of the COVID-19 pandemic and the prolonged state of the crisis.
Unexpected changes in consumer behaviour caused by the pandemic continued to inflict 'significant insecurity' in the company's different markets during the second half of the year, it noted.
"As the exceptional conditions have drawn on, we have managed to operate efficiently, through co-operation with the prominent trade groups and the active use of demand data," said Kuusniemi.
"We have also worked with them to prepare for a possible second wave and its rapid impact on consumer demand. Any clear outlook concerning the demand for the autumn season remains, however, very limited and uncertain. Because of these circumstances, we withdrew our guidance for 2020."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
