THIS WEEK: UB hit by falling KP crisps sales

Sales of KP Foods’ standard crisps have plunged by 50% in the past year in the grocery and impulse market, according to figures obtained by Marketing.

Sales of KP Foods’ standard crisps have plunged by 50% in the past year

in the grocery and impulse market, according to figures obtained by

Marketing.



The sales figures show that while over the year to April 27 1995, KP

Crisps had sales worth pounds 13.81m, sales accrued over the following

year totalled just pounds 6.16m (IRI Infoscan).



The figures will add to speculation that KP’s owner, United Biscuit,s is

looking for a buyer for the crisps division, headed by former Golden

Wonder snacks chief executive Doug Clydesdale.



A spokeswoman for KP confirmed the massive fall and admitted that KP’s

focus has moved away from the standard crisp. ‘The crisps business unit

is concentrating its efforts on brands like Roysters and McCoys, which

are registering substantial growth.’



KP lost a substantial amount of sales in Scotland, its previous

stronghold, when Walkers launched in the region in 1994. But the

spokeswoman said that the general decline in the value of the brand

nationally is offset by a stronger performance in pubs.



KP is a problem area for UB, with profits falling by 35% to pounds 19m

in the year to March, reducing the profit for the whole company to

pounds 127m - a fall of 27%.



The snacks business unit, with brands including Hula Hoops and Skips,

and the crisps unit (KP Crisps, McCoys, Roysters and Brannigans), have

been hit by the growth of PepsiCo brands.



PepsiCo has focused for the past two years on its Walkers and Doritos

brands, which have hammered KP with the aid of increased distribution

and, in the case of Walkers, inspired advertising.



UB’s response at the start of the year was to separate KP into four

units: crisps, snacks, nuts and Derwent Valley Foods. This aimed to give

each of the areas more autonomy in order to increase competitiveness.



However, financial pressures are believed to have stifled ad budgets.

While star performers such as Hula Hoops have managed good growth from

below-the-line activity, other brands have suffered from lack of

advertising support.



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