Sales at Premier Foods fall 4.2%

There's a price war in supermarkets for milk and bread, reckons Robert Schofield. That's good news for shoppers but is making life hard for Premier Foods, where he is chief executive.

The owner of Hovis bread and Branston pickle is heavily indebted due to an acquisition spree before the banking crisis and now faces a slump in sales. They were down 4.2% to £606 million in the third quarter, a result of what Premier calls an "increasingly challenging environment". It is now pinning its hopes on strong Christmas trading to beef up profits.

Premier is also following fashion by closing its final salary pension scheme. The company has 16,000 staff, half of whom are in the fund. They will be moved to a deal that sees their pension based on career average salary.

Premier is trying to cut its £1.4 billion debt pile and has made it clear it is willing to offload some parts of the business. Analysts say one move would be to sell Hovis, perhaps its best- known brand.

Premier's shares, which have halved in the past year, fell another 3% to 18¼p.