Iconic Scots shortbread maker warns labour shortage will lead to lost sales
Shortbread maker Walker’s, which ranks as one of Scotland’s top food exporters, is struggling to find sufficient production staff to meet demand as it battles the fallout from Brexit.
Publishing financial results for the year to December 2020, described by bosses as the “toughest in living memory”, the iconic food producer warned that trading conditions have continued to be challenging in the current year.
Director Jim Walker said: “2020 was a really challenging year, the toughest in living memory, but we’re delighted that we managed to get through it, which we couldn’t have done without the support of our loyal and committed workforce.
“Trading conditions have continued to be challenging in 2021 with the continuing impact of the pandemic and, more significantly, the impact of Brexit.
“Both of these factors have significantly impacted the availability of labour with the consequence that, along with many other food producers, we are unable to find sufficient production staff to meet demand.
“The labour shortage will cost us sales in what would have been an excellent rebound year in 2021 but we are working tirelessly to ensure customer service issues are kept to a minimum.”
His comments came as the firm, based in Aberlour-on-Spey, released results for the year ended December 31 which showed turnover declining to £132.4 million, compared to £148.8m in the prior year.
Operating profit more than halved to £3m, against £6.8m in 2019.
The firm noted that export revenues had dipped from £72.9m to £72.6m in the past year. Walker’s also returned £1.35m in government furlough payments.
In addition to the challenges thrown up by the pandemic the business was faced with the imposition of “punitive” tariffs in its prime export market, the United States.
Throughout most of 2020, the company’s primary concern was the safety and wellbeing of its staff, while trying to ensure that customer service standards were maintained.
The decision was taken to suspend production for an initial period of three weeks while the impact of the pandemic was assessed, Walker’s noted.
Profit for the year was significantly impacted by a number of factors, including costs relating to Covid, reduced sales in the tourism market and the impact of the US tariffs, which were removed in the final quarter of the year.
The firm said “well-argued interventions” by the UK government and Walker’s senior management had led to the tariffs being lifted by the US.
Walker added: “The relaunch of the Walker’s brand identity, with a more contemporary feel whilst still reflecting traditional values, is well underway with the brand available in Sainsbury’s nationwide.
“The international roll-out of the new branding will commence in 2022 and is expected to accelerate the growth of export sales.
“2020 and 2021 have been very challenging years but we look forward to our 125th anniversary in 2023 with a renewed sense of optimism and resilience, confident that the investment we have made in our people, brand and production assets will ensure a secure and prosperous future for the company and its loyal workforce.”