Edinburgh meal delivery firm Parsley Box upbeat despite cost-of-living blow
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The group, which listed on the Alternative Investment Market last year, saw revenues slump by almost a third as high online shopping volumes experienced during the pandemic were not sustained.
New customer revenue reduced as marketing spend was slashed in the first quarter while fresh funding was sought.
The firm 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.
During the first half, product margins rose due to a greater proportion of repeat customer orders and “modest” price increases at the start of the period, which increased average order values by 24 per cent, period on period.
Chief executive Kevin Dorren told investors: “As with other retailers, 2022 has been challenging for the company as consumers feel the effects of the higher cost of living.
“We have continued to invest in product innovation to deliver category expansion with the launch of our larger portion and sharing meals to drive into additional meal occasions and more snacks and bakery to increase basket size.
“We have also introduced the ‘everyday low price’ range of meals at a £2.95 price point to ensure our product range meets the needs of all customers in our target over 65s market, especially those feeling the pressure of increased energy prices.
“Parsley Box’s key competitive advantage is that 90 per cent of our meals can be stored in the cupboard for up to six months and prepared in the microwave in minutes, so our customers can stock up to manage food price inflation and minimize their energy costs, key concerns for all UK consumers.”
He said the firm had taken a number of actions to adapt to the “changing macro-economic climate”, improve its gross margins and reduce overheads to conserve the £5.9 million of funds raised in March.
“The company has strong shareholder support as evidenced during the March fundraise where board members invested over £3m of the total raised,” Dorren added.
“Despite the current market challenges, critically we have maintained the quality of our product and continued to deliver the high standard of service our customers deserve and following the actions taken the company is now in a better position to withstand the macro-economic pressures whilst continuing to develop a long-term future.”
The results for the six months to 30 June show revenue falling to just under £9.6m from £14m a year earlier. New customer revenue came in at £899,000, down from almost £3m.
Losses before tax were slashed from £5.4m last year to about £2.8m in the latest half-year period.
The firm noted that take up of ParsleyClub, its new membership scheme, launched in August to reward customer loyalty and improve customer retention, has been “positive”.
A gifting range was launched in July in preparation for building customer awareness of new food gifts to come for Christmas.