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Last Updated: Monday, 10 January, 2005, 09:57 GMT
Poor Christmas for Northern Foods
M&S meals made by Northern Foods
Northern Foods produces many products for M&S
Disappointing Christmas sales at Marks & Spencer have had a knock-on effect for supplier Northern Foods.

Northern warned its profits will be hit following poor Christmas sales of chilled food "reflecting in particular our trading with M&S," the firm said.

M&S accounts for about a third of Northern's business. It also supplies Tesco, Asda, Sainsbury's and Morrisons. Annual profits for the year to 31 March are now forecast to be about 80m ($150m), against 86m the year before.

Sluggish sales

Last Friday, M&S issued a profit warning following a difficult Christmas trading period. The retail giant saw food sales drop 2.9% over the 13 weeks to 1 January compared with the year before.

The sales fall hit Northern, which makes ready meals, pork pies and other own-brand foods for M&S.

Products that Northern makes for other retailers include Fox's biscuits, Goodfella's pizzas and Dalepak frozen foods.

Northern said underlying sales - which strip out the impact of disposals and acquisitions - were up 1.3% in the 13 weeks to 1 January. The previous quarter had seen a 5.6% sales rise.

The firm said it was making good progress on its reforms which include reducing the number of factories, ordering supplies centrally and restructuring divisions.

"Although the market place remains challenging and highly competitive, we are confident that the actions already taken and those planned will have medium and long-term benefits for the group," Northern said.

M&S profit warning as sales slide
07 Jan 05 |  Business

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