Edinburgh meal delivery firm Parsley Box takes action to help alleviate soaring cost of living
Parsley Box, the Edinburgh-based meal delivery firm, has trimmed prices as consumers face inflationary pressures but the cost of acquiring new customers has shot up, impacting its finances.
The group, which floated on the stock market last year, also revealed that total order numbers fell sharply in the first half of the year, to 212,000 from 385,000 a year earlier.
The firm, whose shares began trading on London’s Alternative Investment Market (Aim) in March 2021, delivers ready meals that do not need to be stored in a fridge or freezer, direct to the “underserved baby boomer-plus consumer”, broadly defined as those aged 60 and over. It faces stiff competition from a number of rivals.
In a trading update to investors, the group said it had continued its product development programme “at pace”. A summer catalogue launched earlier this month with a new gifting range of 40-plus gifts for “all year-round occasions”, ten new slow cooked meals, four new “hearty meals” with a larger portion size, and more drinks, snacks and bakery items.
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Marketing spend and overheads have been “purposefully managed”, bosses noted, resulting in a 42 per cent reduction in adjusted underlying losses to £2.1 million in the first half, compared with about £3.6m in the same period last year.
Revenues in the period amounted to £9.6m, down on the £14m generated a year earlier.
The group highlighted its strong cash position of £5.3m, up from £2.5m at the tail end of last year, with stock levels remaining stable throughout the first half of the current year. Ongoing availability levels have been in excess of 95 per cent, it noted.
However, the cost of acquiring new customers has continued to increase, reaching £34 per person in the first half, up from £31, and the cost of a repeat order has doubled to £6 from £3.
Parsley Box warned: “Deploying cost effective marketing spend continues to be a key challenge in the business and the marketing strategy continues to evolve.”
A new TV campaign is due to launch in September and run for the rest of the financial year, but the group will reduce other marketing acquisition activities from the fourth quarter should the high cost of acquisition continue.
Chief executive Kevin Dorren said: “We have continued our product innovation at pace to increase the opportunities for customers to order from us, and remain focused on balancing investment in customer acquisition and maintaining cash reserves, whilst we navigate the challenging consumer environment.
“We recently brought down the price of a range of customer favourite meals to £2.95 to help alleviate the rising cost of living, and have frozen all prices until September. We remain well funded and continue to deliver quality, good value, and nutritious food.”
Last month, the firm said it had teamed up with a range of “iconic British brands” to create Wimbledon cream teas. The move to tie in with the fortnight of tennis action at SW19 followed the “highly successful” sell through of its Jubilee Tea for Two offer.