Customer loyalty helping to lift Crawshaw

The Rotherham-based group, which owns butchery shops across Yorkshire, Lincolnshire, Nottinghamshire and Derbyshire, said while total sales in the six months to the end of July fell from £9.4m to £9.3m, like-for-like sales increased four per cent.

Since the end of July like-for-like sales have improved further, rising seven per cent. Crawshaws said gross margin has also “responded well” to profit-improving initiatives, rising by one percentage point in recent weeks.

Crawshaws has been focusing its efforts on medium and larger stores, which deliver the best returns, including opening a larger store in Doncaster. It also blamed some of the sales fall on reducing lower margin wholesale business.

Chairman Richard Rose said: “The retail climate remains particularly challenging, and is likely to remain so for the foreseeable future. However, we are encouraged by the very high customer loyalty on the back of excellent quality and value for money.

“The improvements in average spend of nine per cent over the last year are a testament to this.”

Crawshaws posted pre-tax profits of £97,000, versus £68,000 a year earlier. Net debt was flat at about £185,000.

Crawshaws said it has bought new equipment, hired more staff and trained employees to cope with a change in rules on the sale of hot food.

Dubbed the ‘pasty tax’, the controversial ruling adds a 20 per cent sales tax on fresh foods that are kept warm.

Crawshaws, which sells hot meat joints including roasted chickens, instead plans to sell such products “on the cool” – and therefore VAT-free.

Gross margin edged up slightly to 43.6 per cent.

It said overall costs have fallen in line with the lower sales, but the savings have been partially offset by investment in marketing and certain restructuring costs.

Mr Rose said Crawshaws has seen no impact from the US drought, despite warnings it may push up meat prices.

He added the company has no plans to leave the stock market, and will consider paying a dividend “when the time is right”.

“We get very strong feedback from shareholders that they want us to retain the listing and therefore we shall,” he said.