Boughey Distribution’s operating profit fell to £1 million over the six months ending 30th November 2010, from £1.7m the year before despite an 8.3 per cent rise in sales to £22.3m.
Boughey parent NWF said food operations suffered from unstable demand patterns from supermarkets.
NWF chairman Mark Hudson said: “Food has experienced significant volatility and higher than anticipated storage volumes, presenting a challenge to operational efficiencies, as the lead time to supermarkets has reduced and promotional activity increased.”
Boughey saw average storage levels rise to 111,000 pallet spaces from 100,000 the year before as customers anticipated greater demand from retailers.
The group said: “We won two new customers in the period. Outbound loads were only 5 per cent higher than the prior period as customer stock turn reduced and volatility made it more challenging to achieve effective backloads. Customer service in the period remained strong at 99.4 per cent.”
NWF’s overall group operating profit was up 10.3 per cent to £3.2 million.