Kellogg’s to slash costs and staff as profits take £6.5m hit
PROFITS at cereal giant Kellogg dipped by £6.5m last year as the trend for healthier breakfast alternatives kicked in, prompting a cost and staff reduction programme.
Kellogg Company of Great Britain, based at Trafford Park, Manchester, has reported pre-tax profits of £15m for the year to January 2, 2016, on revenue of £134.698m (2014: £150.156m).
According to newly filed accounts, staff numbers fell by 90 from 985 to 895 during the period, with a £13.4m in payroll costs to £60.3m.
Its highest paid director also took a pay cut – receiving £139,000, compared to £143,000 in 2014.
“Within the European region and the UK in particular, a number of initiatives are progressing through various stages of execution, including reductions in employee numbers at the Wrexham and Manchester facilities,” the year-end directors’ report said.
The dip in fortunes for the world famous brand is consistent with the highly competitive convenience breakfast food market.
Analysts say consumers believe mainstream products are too sugary and that sales have been declining and traditional suppliers like Kellogg’s have been under pressure for some time from a multitude of more healthy alternatives.
Innovations such as character licensing are helping to stem the tide – last year Kellogg introduced Disney Frozen cereal, for example.
Kellogg’s Trafford Park facility is the European headquarters of the New York Stock Exchange-listed Kellogg’s – based at Battle Creek in Michigan.
Kellogg’s was approached for a comment by TheBusinessDesk.
