Irwin's Bakery ends year in the red despite turnover of £29.6m
Tough trading with supermarkets led Irwin's Bakery to suffer a loss of £128,574 for the year to the end of March 2015, it has emerged.
Craigavon-based WD Irwin & sons, Northern Ireland's biggest independent bakery, produces goods from loaves to muffins.
The company had turnover of £29.6m - down slightly on turnover in 2014 of £32.8m - but still finished up the year in the red.
But its losses were improved from £543,096 a year earlier, according to accounts filed this month at Companies House.
Its turnover was double that of its closest rival, McErlain's in Magherafelt, which trades as Genesis Crafty - but Irwin's loss compared with a pre-tax profit of £500,000 at McErlain's in its most recent financial year.
In a strategic report, Irwin's directors said it had had a "disappointing" year. "It was largely as a result of very competitive trading conditions, particularly within the multinational retail grocery sector."
And Irwin's vowed that it would improve its performance. Its strategic report said: "The directors have every expectation that the action plan in place will deliver improved financial performance and lead to sales and profit growth over the coming year."
Irwin's stocks Tesco, Asda, Sainsbury's, Henderson Group, Musgrave Group and independents. In Great Britain it supplies Morrisons, Waitrose, Tesco and Sainsbury's. Ranges include Paul Rankin breads and bun brand Howell's.
Supermarket suppliers in Northern Ireland - and particularly vegetable growers - have said they are suffering from low supermarket pricing. Robin McKee, a potato farmer in Comber, said he was receiving just 14p per kilo for his potatoes.
Just this week, Asda announced it would be spending another £500m on cutting its prices for customers. But during a visit to Asda in Dundonald yesterday, Asda boss Andy Clarke said it did not see its suppliers in Northern Ireland as having any problems.
"We have really strong relationships with our suppliers," he said. "Northern Ireland Year of Food is another good example of how we are at the forefront of driving suppliers, big and small." The company's executive chairman Brian Irwin told Business Telegraph in November that high competition in the supermarkets was "the over-riding issue".
"The discounters continue to build their share and the big chains like Asda have seen poor results. They are fighting a price war against each other and against the discounters," he said. He described trading conditions in bread as "very challenging". "Consumers want a bargain. The canny shopper has emerged from the recession and is prepared to go to a number of stores to complete their shop.
He said there was "overcapacity" of bread in Great Britain, Northern Ireland and the Republic. However, there had been "rationalisation" in the sector in the Republic. "Further rationalisation there cannot be ruled out," he said.
In November, the firm announced an export deal for a range of Irish biscuits to China. And in June, it spent £350,000 on rebranding of its Rankin Selection of Irish breads.
Irwin's described Rankin as "The number one Irish bread range in the UK" and said the brand was worth £9m.