Fresh produce firms may see sales fall by 30%, analyst says

Any of the UK's 1,200 fresh produce firms could see sales fall by almost a third next year, according to analysts who are warning businesses to adopt survival strategies.

Plimsoll's Recession Edition Report - Fresh Produce showed one-sixth of the firms would struggle to cope as rising debts threatened their survival. Meanwhile, up to 5,000 jobs could be at risk and several businesses would see staff numbers reduce by 40% as costs came into line with sales.

But Plimsoll said the results showed "rather bizarrely" that for many firms a fall in sales would be good news. Senior analyst David Pattison said: "They will make more profit by reducing debts. Firms don't have to fail; they can go into a cost-reduction exercise and rationalise if they've overstretched.

"A reduction in capacity in the market may make companies focus on what they are doing and why. They can hone their service, bringing more stability to the market."

But firms needed to act now to weather the storm, he added. As unpopular as job losses and cost reducing were, businesses would have little choice.

The report includes survival strategies focusing on performance indicators for productivity, debts, profits and cash flow. Plimsoll looked at growers, wholesalers, importers and distributors. Email c.sherwood@plimsoll.co.uk or telephone 01642 626422. The report costs £350.


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