Budget supermarket chain Farmfoods has said rising costs weighed on its profit as it battled to keep prices down for its customers.
The business, which is headquartered in North Lanarkshire in Scotland, has posted a pre-tax profit of £33.1m for 2024, up from the £25.5m it achieved in 2023.
However, Farmfoods said “increased cost pressures” resulted in its operating profit being cut from £23.9m to £9.8m.
New accounts filed with Companies House also show its sales increased in 2024 from £1bn to £1.1bn.
A statement signed off by the board said: “The group continued to trade profitably during 2024, however our commitment to keep prices low for our customers while facing increased cost pressures throughout the business resulted in a reduction in profitability compared to the prior year.
“Our core frozen product range was enhanced through continued new product development while new lines in grocery and household further expanded out offering to customers.
“The group made significant investment in opening new retail stores while also increasing capacity within its distribution function.
“The group plans further investment in shops in the coming year.”
Farmfoods rival Iceland in the red
The results for Farmfoods come after City AM reported in August that rival Iceland had warned it is being forced to increases prices because of Chancellor Rachel Reeves’ tax raids as the supermarket chain fell into the red.
The Flintshire-headquartered said that while it is “doing our utmost” to offset increasing costs arising from last year’s Autumn Budget, it will “inevitably have to pass some of these on to consumers”.
The chain added that as a result, it expect UK food price inflation to peak at some four to five per cent in the next six months.
Iceland also said that it is currently working to “fully offset the substantial cost increases we incurred at the beginning of the new financial year” as a result of the rises in employers’ National Insurance contributions and the National Living Wage.
The comments were included in new accounts filed with Companies House for the firm’s financial year to 28 March, 2025.
The results show Iceland fell to a pre-tax loss of £900,000 in the 12 months, having posting a pre-tax profit of £15.6m in the prior year.
Its profit before interest and tax declined from £87.1m to £76.6m while its turnover increased from £4.10bn to £4.11bn.