Farmfoods sales crash 17 per cent

FARMFOODS, the frozen food retailer owned by one of Scotland’s wealthiest families, has seen sales and profits fall – but has still paid out a handsome dividend.

The business, which is second only to Iceland in its sector, saw turnover for the 52 weeks to January 2, 2016, fall 17 per cent from £856million to £729million, while pre-tax profits dropped 4 per cent to £30million.

The North Lanarkshire-based company paid out a dividend to shareholders though, but cut it from £300,000 to £225,000.

Chief executive and majority shareholder Eric Herd wrote in the accounts that ‘trading conditions have been and are expected to remain competitive’.

In recent years, the company, which was traditionally seen as a budget retailer, has successfully attracted more middle-class consumers and has been increasing its market share.

Herd and his family are thought to be worth around £230million thanks to their share in the company, which started trading in Aberdeen in 1955, and now has 300 stores across the country, employing 4,320 people.

Retail analyst Priya Chandarana, of grocery research firm IGD, said: ‘This significant drop in sales indicates a tough year, following two years of double-digit growth... Farmfoods needs to raise its profile and stand out to win back shoppers and drive sales.’