One in four companies in the UK Fresh Produce industry is making a loss as economic conditions continue to take their toll, according to a new report released by Plimsoll.
The group's 'Plimsoll Analysis – Fresh Produce' study reveals how many of the 235 loss making companies have simply had an isolated bad year and how many are 'burying their heads in the sand'.
'More and more companies are making a loss for the first time in their history,' said David Pattison, author of the market report into company performance. 'Many can rightly claim to be victims of difficult trading conditions. A quick refocus on profitability would ensure this an isolated occurrence.'
However, overall conditions are no excuse for a band of serial loss makers in the market, Pattison explains.
'110 companies are making a loss for the second, even third year running and are simply selling at prices their business cannot sustain,' he said. 'They have put off making the painful decision that more prudent companies made a while ago. No one wants to trim costs, lay off staff, cancel dividend payments and the like but carrying on regardless is now unviable. They can no longer bury their heads in the sand.
'I congratulate management teams that have made the often difficult and unpopular decisions,' Pattison noted. 'They have cut their cloth according to the market conditions and are more stable for it. Those failing to do so are running out of time and cash. Without a big increase in demand they cannot support their pricing strategy much longer. Watch out for a number of failures among the companies we have identified.'
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