Butchers hit by increasing costs

SOUTH Tyneside butcher Dicksons has continued to invest in its business in its 70th anniversary trading year, despite seeing cost pressures lead to an overall loss.

The South Shields company, which supplies meat and bakery goods to its network of shops and regional wholesale market, saw revenues grow 9.4% to £17.6m in the year ended June 30, 2023.

Its sales were buoyed by the opening of an additional shop in South Tyneside.

But it said that rising costs ate into its bottom line, turning the previous year’ operating profit of £335,681 into an operating loss of £202,662.

The loss for the year was £132,816, compared to the previous year’s profit of £346,738.

In a review of the business, managing director Chris Hayman said the financial year was a strong one for sales performance, although the firm saw a number of cost challenges which are now said to be easing.

He said: “Retail shop turnover grew by 6.2%, boosted by the opening of a new shop opening in South Tyneside in December 2022 as the company continued to invest in the retail estate. Wholesale sales grew by 17.9% from a mixture of new listings and new customers.

“With the addition of a new account manager in the year previous, we’ve seen strong growth of revenues associated with new lines, as we continue to focus on capitalising on our brand strength in this area.

“Total sales for the year ended 30 June 2023 finished well ahead of budget which was very pleasing, however the increasing cost pressures seen towards the end of 2022 continued throughout 2023, which impacted negatively on our margins. Raw material costs as a percentage of revenue rose during the year to 32.4%, which coupled with the increases to National Minimum Wage and other inflationary increases resulted in our GP margin declining to 22.8%.”

Chris Hayman