McDonald's salad supplier, Agrial Fresh Produce, has managed to reduce its losses through price increases following three years of "upheaval" due to labour shortages and rising costs, according to recently filed documents. The Staffordshire-based company, which also owns the pre-packaged salad brand Florette, reduced its pre-tax loss to £5.5m in 2023, an improvement on its pre-tax loss of £7.7m in the previous year.
Despite this, the producer saw its turnover fall to £107.5m from £115.8m in 2022, a decrease it attributed to lower demand "across the retail salad category" due to increasing price pressures. The French co-operative group-owned business said it had offset these rising costs by increasing its customer prices to "recover inflation", which it described as "essential to the sustainability" of the business.
It acknowledged that this had resulted in the loss of retailer customers, but this was partially compensated by gains within its food service division. During this period, the company cut 32 jobs, reducing its total number of employees to 868 from 900 the previous year.
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In a statement released to Companies House, as reported by , the firm stated: "2023's dominant issue has remained the inflationary pressures, both in our supply chain, the wider market, and the economy as a whole.
"Whilst we saw inflation in the market easing towards the latter part of the year, we are still a long way from a flat or deflationary position.
"Labour costs increased significantly again in 2023, driven by CPI and statutory minimums, helping to address the cost of living crisis.
"Fortunately, the increases no longer seem to relate to scarcity and labour supply in suitable to meet demand in most cases. The labour cost increase impacts us both directly in our business and in our wider supply chain."
"Our response to these increases has continued to take two routes: in addition to bolstering our programme of optimising and mitigating costs in our day to day operations, we've also implemented the re-structuring of the shifts and working patterns in our two biggest sites.
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"Whilst ensuring that quality and safety remain paramount, and service level is not impacted, our operating windows have been refined to optimise our available vs required capacity.
"We have [also] continued to work with our customers to mitigate, where possible and, after exhausting that, passed on cost increases.
"This process remains difficult, and we appreciate the challenges facing our customers too, but this economic reality remains essential in this inflationary market."