Trading Statement

Crawshaw Group plc

Trading update

Crawshaw Group plc ("Crawshaw" or the "Company"), the meat focussed retailer, provides the following update on current trading and the outlook for the current year.

Recent comments by certain grocery retailers have referred to "extremely tough market conditions" that are likely to prevail for the remainder of the year. Crawshaw trades in the same environment as these retailers and, reflecting prevailing market conditions, sales in recent weeks across all our outlets have been below expectations. Like for like sales for the year to date are now 2% below last year. In addition, continued rising meat prices have put pressure on our margins with year to date margins now being 1 percentage point below last year. In view of this, we expect trading conditions to remain challenging for the foreseeable future.

Recent customer feedback continues to indicate extremely high levels of satisfaction with quality, service and value for money. As footfall in our stores has remained robust, we believe that the decline in sales is being driven by customers trading down and making purchases last longer.

The average customer spend is just over £4 and management consider that there is an opportunity to broaden the product offer in order to increase sales to existing loyal customers, and to make the retail space work harder. Side dishes, desserts, sauces and more take-out options are all being considered. Recent customer research has confirmed this opportunity and has informed management as to the areas of focus for product development. 

Accordingly, we are in the process of recruiting a category / marketing manager, a hot food development manager, and a category buyer. Although this represents an unbudgeted cost in a period of weak consumer demand, management consider that this is an opportunity which warrants further investment. 

As a result of current trading results and additional recruitment costs, the Company now expects profits for the current financial year to be lower than previously anticipated.

Our balance sheet, however, is strong and this month we have repaid all our bank borrowings, with the exception of a property backed mortgage to the value of £840,000.

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