John West, renowned for its canned tuna, faces financial challenges, reporting a pre-tax loss for the first time since 2010.
- The company recorded a pre-tax loss of £6.7m in 2023, a significant drop from a £2m profit in 2022.
- The Liverpool-based brand attempted to handle rising global commodity costs by implementing price increases, which did not succeed.
- Despite turnover increasing to £134.5m, gross profit decreased significantly due to strategic pricing decisions.
- The decision to not transfer all inflationary costs to consumers aimed to protect the brand’s market presence.
John West, a company known for its canned fish products, has announced a pre-tax loss for the first time since 2010. This comes as a result of an unsuccessful attempt to increase prices to counteract rising global commodity costs. The company’s financial report for 2023 shows a pre-tax loss of £6.7 million, a stark contrast to the £2 million profit it enjoyed in 2022.
The attempt to raise prices to mitigate the impact of soaring global commodity costs did not go as planned for the Liverpool-headquartered company. Despite an increase in turnover from £128.2 million to £134.5 million in 2023, the company saw its gross profit margin drop significantly. Gross profit decreased to 9.1% of sales from 17.6% in 2022.
The company’s accounts showed that its strategic decision to forego passing all inflation-related cost increments onto its customers was aimed at maintaining its customer base and market share. This decision resulted in reduced profitability, highlighting the challenges businesses face in balancing cost management with market competitiveness.
Established in 1857, John West has a long history of producing various canned seafood, including salmon, mackerel, and sardines. The company has been under the ownership of Thai Union Group since its acquisition in 2010. This financial downturn marks a significant moment in its contemporary operations.
John West’s financial setback underscores the complexities involved in pricing strategies within volatile global markets.
