Mindful Chef introducing a delivery charge helped to significantly cut its annual loss despite its sales also falling, it has been revealed.
The London-headquartered business has reported a pre-tax loss of £1.7m for 2023, after also losing £7.4m in 2022.
Newly-filed accounts with Companies House also show that Mindful Chef’s turnover fell from £58.8m to £50.9m in the year.
The meal kit retailer was founded by friends Rob Grieg-Gran, Myles Hopper and Giles Humphries in 2015.
In November 2020 it was announced that a majority stake in the business had been acquired by Nestlé.
During the year the average number of people employed by the company fell from 117 to 90.
A statement signed off by the board said: “During the year, the decision was made to exit ready meal product from retail as it was profit dilutive.
“Excluding this channel year on year sales were -12 per cent.
“There has been significant improvement across the year in the direct to consumer channels, with turnover in January being -26 per cent and turnover in December being +7 per cent.
“The directors are pleased with the progress made across the year and the stabilisation after the net churn experienced in the years after the Covid-19 peak.
“Gross margin increased from 25.1 per cent to 32.9 per cent reflecting the payback of investing in the operations, reducing operational costs, managing the challenges from inflationary economic conditions well and increased average order value partly due to introducing a delivery charge.”
Mindful Chef added that its pre-tax loss reducing was mainly because of better gross margin and delivering higher gross profit at a lower turnover.
It also said: “The business also reduced overhead costs to align to the lower turnover levels.
“On marketing spend, the company chose to reduce this somewhat to focus on the profitability of the business, whilst still balancing the business strategy to invest in driving customer awareness, building the brand and acquiring new customers.”
On its future, Mindful Chef said its directors are “confident” in its long-term strategy to focus on high quality food and that the business has “settled” after the Covid-19 pandemic.
The company added that its objective for 2024 is to “focus strongly on driving profit through targeted marketing and further efficiencies in operational costs”.