PARSLEY Box has warned that it will have to lift prices on “selected” product lines as supply chain challenges continue to put pressure on input costs for the food and drink industry.
The warning came from the Scottish ready-meal company, which delivers direct to the doors of its Baby Boomer target demographic, as it reported a widening of first-half losses.
Shares in the company plunged by 13.6 per cent, or 16.5p, at 105p.
Parsley lost £5.4m before tax in the six months ended June 30, following a loss of £1m at the same stage last year.
However, revenue climbed by 26% to £14m while its number of active customers rose by around 77% to 177,174. Repeat orders increased by 38.3% to 256,089, with the average order value rising by 8%, to £43.30.
Chief executive Kevin Dorren said the company had shown “positive momentum” in the first half when compared with a “very hard comparison” last year, when demand for food had soared in the early months of the pandemic.
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Asked if the company had been affected by the shortages that are blighting the UK supply chain, Mr Dorren said the issues were affecting all companies in the sector.
He told The Herald: “It definitely is meaning we are having to do more planning than we had [to] historically, and we need to be more aware of delivery time slots. But I do think, arguably, that it is here to stay for quite a period of time, and we all – consumer and businesses – just need to get used to not always walking into a shop and seeing what we saw before, which was full shelves.
“We are going to see some shortages for the foreseeable future, but we have managed to cope relatively well with that. We certainly haven’t had any labour shortages and hopefully that remains going forward.”
Parsley Box noted in its statement to the stock market that while it had “largely maintained” its input prices and margins in the last four years, it is now seeing input prices rise. The company said: “We expect to negate any input price rises by retail price increases on selected lines in H2 2021.”
On trading generally, Mr Dorren said while Parsley Box had grown “dramatically” during the first half of last year, its performance in the first half of 2021had been “relatively consistent” with previous periods.
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He said: “I think we are pretty pleased with where we are, and still focusing on the long-term journey of trying to be a market leader in this fairly under-served and untapped demographic.”
Speaking as the media spotlight focused on how the UK Government intends to meet the cost of social care, shortly before Boris Johnson announced a hike in national insurance contributions, Mr Dorren said Parsley Box was well placed to help senior people who want to remain independent and live in their own homes.
He said: “As a provider of meals to that demographic, we still have lots of scope to acquire and interest lots of new customers. One in four of the population is now over 60, so it is quite a large segment. We are not really running out of headroom in terms of customers that we can bring into the brand.”
The company recently introduced a new, more premium chilled range in August, which has elicited a positive response. “That has definitely resonated very strongly with our customers and we have seen good uptake of that, although it is early days,” Mr Dorren said. “We’re constantly innovating, we are constantly trying different products to attract customers and retain them, and we are constantly using feedback from our customers – we have thousands of data points now – to try and do a better job of that.”
Parsley Box, which is chaired by high-profile entrepreneur Chris van der Kuyl, was valued at £84 million when it listed on the stock market in March.
The company currently employs 130 staff across its warehouse in West Lothian and customer support team in Edinburgh’s Quartermile. Ms Dorren said it is actively recruiting new staff.
The company has appointed Holly McComb as its new chief financial officer. Ms McComb, who was most recently finance chief of TV Squared, will replace John Swan when she joins on September 13. Mr Swan is to retire.