News: Crawshaw's confidence hit by Chancellor's VAT rise
Crawshaw, the Rotherham-based meat-focused retailer, has posted their financial results for the year January 31 2012 with a decline in sales in a challenging retail climate.
The Bradmarsh Business Park company saw sales for the year of £18.9m, slightly down from the previous year (£19.1m). Like for like sales were down 4%.
Operating profit for the year was £0.1m, down from £0.6m in 2011 and profit before tax, including impairment, was reduced to £nil.
The group has been affected by key customers, hard pressed families and pensioners, struggling to make ends meet. Crawshaw also felt the impact of reduced footfall in the high street.
Other factors affected the results including the sale of a site on Doncaster market, the planned reduction in lower margin wholesale business, and the opening of a new store in Derby.
As a result of tough market conditions that had affected sales and profit margins, the company announced in June last year that they would look to broaden the product offer in order to increase sales to existing loyal customers, and to make the retail space work harder.
New directors and staff were brought in to implement the changes. Richard Rose, chairman of Crawshaw, said: "I'm pleased to report some success with these measures. We did indeed manage to reverse the sales decline, with like for like sales rising 2% in Q4. In addition, average spend on fresh products rose by 17% in Q4 leading to a total of 22% (2011: 6%) over the year.
"I believe the measures we have implemented are working and that they are producing the beginnings of profitable growth."
Looking ahead, the chairman has been encouraged by the group trading ahead of expectations since the financial year end. Like for like sales continued to increase by 3%
However, he added: "Unfortunately, my confidence following the restoration of profitable sales growth has been undermined by the Chancellor's decision to propose the introduction of VAT on hot food from 1st October this year.
"Having worked extremely hard to offer good value to our loyal customers, and to maintain key affordable price points, I find it very unfair that small format High Street food retailers, and hard pressed families and pensioners, are being targeted in this way.
"Some 38% of our sales are generated from hot food, and we are unable to predict the effect this imposition of VAT will have on our performance. We will of course do everything possible to mitigate any negative impact.
"We are vigorously opposing the VAT increase, with press, and in store campaigns, as well as making representations to the Treasury."
Crawshaw website
The Bradmarsh Business Park company saw sales for the year of £18.9m, slightly down from the previous year (£19.1m). Like for like sales were down 4%.
Operating profit for the year was £0.1m, down from £0.6m in 2011 and profit before tax, including impairment, was reduced to £nil.
The group has been affected by key customers, hard pressed families and pensioners, struggling to make ends meet. Crawshaw also felt the impact of reduced footfall in the high street.
Other factors affected the results including the sale of a site on Doncaster market, the planned reduction in lower margin wholesale business, and the opening of a new store in Derby.
As a result of tough market conditions that had affected sales and profit margins, the company announced in June last year that they would look to broaden the product offer in order to increase sales to existing loyal customers, and to make the retail space work harder.
New directors and staff were brought in to implement the changes. Richard Rose, chairman of Crawshaw, said: "I'm pleased to report some success with these measures. We did indeed manage to reverse the sales decline, with like for like sales rising 2% in Q4. In addition, average spend on fresh products rose by 17% in Q4 leading to a total of 22% (2011: 6%) over the year.
"I believe the measures we have implemented are working and that they are producing the beginnings of profitable growth."
Looking ahead, the chairman has been encouraged by the group trading ahead of expectations since the financial year end. Like for like sales continued to increase by 3%
However, he added: "Unfortunately, my confidence following the restoration of profitable sales growth has been undermined by the Chancellor's decision to propose the introduction of VAT on hot food from 1st October this year.
"Having worked extremely hard to offer good value to our loyal customers, and to maintain key affordable price points, I find it very unfair that small format High Street food retailers, and hard pressed families and pensioners, are being targeted in this way.
"Some 38% of our sales are generated from hot food, and we are unable to predict the effect this imposition of VAT will have on our performance. We will of course do everything possible to mitigate any negative impact.
"We are vigorously opposing the VAT increase, with press, and in store campaigns, as well as making representations to the Treasury."
Crawshaw website
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