Cadbury sales slump 25% since salmonella scare

Published on Monday 31 July 2006 00:50

SALES of Cadbury chocolate products have dropped dramatically in the wake of the controversial product recall sparked by a salmonella scare last month, a new report has shown.

Britain's leading High Street supermarket chains say that the storm of negative publicity over the chocolate has devastated the trust of shoppers leading to sales plummeting by 25 per cent.

The full scale of the damage to the company's balance sheet could be revealed this week when Cadbury unveils its interim results. Trade magazine The Grocer said that a source at one major supermarket, which did not wish to be identified, reported that its sales of Cadbury chocolate had fallen by 25 per cent since the recall at the end of June.

The source said: "It is down to the way it has been handled - people do not trust the brand any more. The week the salmonella story broke there was a huge drop in sales and it has pretty much remained at that level."

The Grocer said that a rival supermarket chain also reported a similar drop in sales of Cadbury chocolate.

Hot weather has had some impact on the popularity of chocolate in general - with Nestle sales down about 10 per cent - but the far greater fall in Cadbury sale is seen as a clear indicator of a lack of consumer confidence.

That drop-off in sales appears equally to have been witnessed in Scottish supermarkets.

The manager of one Edinburgh supermarket yesterday said: "We noticed a slight downturn in the first couple of weeks after the salmonella scare. It's picked back up a bit but we are noticing the customer focus is increasingly towards our own chocolate brand and away from Cadbury.

"Staff are also very aware of it and seem to be buying fewer Cadbury bars in their breaks."

John Allert, chief executive of brand consultancy Interbrand told the magazine that Cadbury needed to raise its profile by using a broad range of media to rebuild trust in consumers and trade.

He said: "Cadbury will recover, have no doubt. But they need to be using communications vehicles that are appropriate for delivering a message rather than just brand building."

Last month Cadbury recalled one million chocolate bars in June because of salmonella fears. The company's chocolate was identified by the Health Protection Agency to be the most likely cause of an outbreak of salmonella poisoning.

Up to 46 of the 65 cases of salmonella montevideo reported to health officials between March and July could be linked to the product, according to the agency. It is understood nine of the cases were in Scotland.

The firm blamed a leaking pipe at its Marlbrook plant in Herefordshire for the salmonella contamination.

Cadbury agreed to improve its testing procedures after FSA experts said they were not up to modern standards.

The seven brands affected by the recall were the 250g Dairy Milk Turkish, Dairy Milk Caramel and Dairy Milk Mint bars, the Dairy Milk 8 chunk and the 1kg Dairy Milk bar as well as the 105g Dairy Milk Buttons Easter Egg and the Freddo bar.

Lawyers have said the first official confirmation of a likely link could lead to a flood of compensation claims against Cadbury.

Following news of the scare, Brand Index, which monitors the reputation of hundreds of organisations on a daily basis, compiled a "brand score" for Cadbury based on the responses of those polled to a number of questions about how the company is perceived. In the days before the salmonella scare broke, Cadbury enjoyed a score of 44, but within two weeks that fell to just 22.

Cadbury declined to comment. This week the company unveils its interim results and the first week immediately after the recall will be included in the period covered.