John West, the well-known tinned fish manufacturer, records its first deficit in over ten years due to a strategic price freeze.
- Despite a 4.9% rise in sales, John West posted a £6.7 million pre-tax loss by year-end 2023.
- The company’s decision to prioritise customer loyalty by not transferring inflation costs to consumers contributed to reduced gross profits.
- Sales were previously hindered by price hikes amid rising inflation in 2022, leading to a significant 13.5% drop.
- Future market expansions are anticipated after internal changes and the introduction of sustainable packaging.
John West, a reputable name in the tinned fish industry, has reported a financial downturn, marking its first loss in over a decade. A strategic decision to freeze prices, even amidst rising inflation, positioned the company in financially turbulent waters, leading to a pre-tax loss of £6.7 million in the fiscal year ending 31 December 2023, despite achieving a 4.9% increase in sales, which climbed to £134.5 million.
The company’s approach, focusing on maintaining competitive pricing to secure long-term brand loyalty rather than immediate profit margins, played a pivotal role in this financial outcome. The organisation stated that a reduction in gross profit margins was, in part, a consequence of its deliberate choice to shield customers from global commodity price hikes. This strategy was aimed at preserving its customer base and market share.
In the previous year, John West had opted to increase prices in response to inflationary pressures, which had adversely affected sales volumes and resulted in a £20 million downturn, equivalent to a 13.5% sales decline. Despite these challenges, the brand remains optimistic about its core UK market’s resilience and future strategic developments.
Looking ahead, John West mentions potential expansions into new product ranges and food market sectors, contingent on suitability and strategic fit. Earlier this year, the company promoted Mark Doherty, a veteran in the company for fifteen years, to managing director, a role in which he will steer both UK and international markets.
Additionally, John West has undertaken environmental initiatives, such as the launch of recyclable aluminium ‘Ecotwist’ strips, reflecting its commitment to sustainability and innovative packaging solutions intended to minimise excess packaging and environmental impact.
Despite current financial setbacks, John West remains poised for strategic growth and innovation in the competitive tinned fish market.
