Shares in food sourcing, processing and packaging giant Hilton plunged on Tuesday as soaring prices continue to weigh on demand for meat and fish.
FTSE 250-listed Hilton Foods flagged a ‘more cautious’ trading outlook, amid inflationary woes and continued disruption to shipments of smoked salmon to the US.
Hilton, which partners with retailers like Tesco to supply their private-label products, had previously warned rising prices have hurt consumer demand for seafood as large cuts to fishing quotas have driven double-digit inflation.
Meat costs have also risen sharply, with European beef prices up around 50 per cent year-on-year, which has limited supply and hit consumer appetites.
Hilton told investors that sales volumes of red meat were ‘solid’ over the three months to 19 October, but ‘price inflation pressures continue to weigh on underlying demand’.
It added: ‘While we expect the salmon category to benefit from increased demand over the festive period, the wider UK seafood division continues to be impacted by softer white-fish demand.
‘This is driven by ongoing high raw material inflation and cautious consumer spending.’
Scaling down spend: Higher prices are putting shoppers off seafood, Hilton says
It comes after data showed grocery price inflation slowed in October as retailers boosted promotional offers and Christmas deals.
However, at 4.7 per cent, grocery prices are still rising ahead of the overall rate of inflation and continue to weigh on household finances.
Elsewhere, Hilton said its Foppen smoked salmon business in Europe continues to ‘experience operational disruption due to regulatory restrictions on shipments to the US’, resulting in extra costs.
Hilton now expects full-year pre-tax profits to come in at £72million to £75million, and net debt to be ‘marginally higher’ than at the end of last year.
The group said: ‘Given the emerging impact on demand from ongoing inflationary pressures and the continued disruption at Foppen, the board has become more cautious on the trading outlook for 2026 and as such expects profit progression in the next financial year to be difficult.
‘The group continues to leverage its long-term customer relationships, strength in product innovation, and operational efficiency to deliver affordable, high-quality products and to build a strong platform for sustainable long-term growth.’
Hilton Foods shares plunged 23.3 per cent to to 491.5p in early trading, having almost halved in value since the start of the year.
Analysts at Peel Hunt slashed their target price for Hilton Foods shares from 1,030p to 670p in response, and downgraded the stock from a buy to a hold rating.
Peel Hunt said: ‘These are challenging times, with higher prices resulting in softening volumes, combined with the specific issues in fish.’
Shore Capital equity analyst Darren Shirley said: ‘Hilton has demonstrated relative resilience through challenging market conditions; however, ongoing inflationary pressures, weak seafood demand, and operational issues at Foppe continue to weigh on profitability
‘Despite these pressures, Hilton enters this tougher period with a strong balance sheet and new international opportunities in Canada and Saudi Arabia.’
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