Walker’s tightens costs as profits hit by tough trading – Daily Business

Soaring energy, raw material and labour costs, together with cautious consumer spending, took their toll on Walker’s Shortbread.

Operating profits for the 2025 calendar year fell 57% to £6.9 million from £16.2m in the previous year, while pre-tax profit was down 51.5% to £18.07m from £8.8m.

Revenue held up, with only a slight dip to £196.8m, a 2% reduction on the £201m reported in 2024.

The 128-year-old family-owned business said it contended with complex environmental factors and trading conditions throughout the year.

Domestically, trading was impacted by cautious customer ordering patterns whilst internationally, the key US market presented difficult trading conditions, mainly because of tariffs.

Operationally, the business absorbed the impact of escalating commodity and energy prices. Of particular significance was the rise in butter costs compared to the previous year as well as continuing global affairs causing uncertainty in terms of availability. 

Ongoing labour cost increases and continued sector-wide labour shortages meant the company had to pay more overtime hours. These combined business pressures consequently impacted margins.

Despite these headwinds, domestic and international demand for Walker’s remains high with around 50% of produce successfully exported to about 100 markets.

The Walker’s Shortbread board said it is comfortable with the current strategy and will continue to focus on further operational efficiency through competitive tendering, longer-term contracts and continued investment in its people, operations and brand.

Confidence in future business performance is underpinned by the strength of the Walker’s brand, including its partnership with global ambassador and forme tennis champion Sir Andy Murray, a robust balance sheet and a clear strategic focus on quality, new product development and opportunities for increased routes to markets.

To support this long-term growth strategy, the business also reinvigorated its leadership team during the year. Justin Stead was appointed chairman, succeeding Bob Brannan, alongside the appointment of Bryony Walker as commercial director.

Nicky Walker, managing sirector, said: “The board took a deliberately cautious outlook for 2025, following a period of significant and sustained growth as the world recovered from the pandemic years.

“We were prepared for market headwinds and tough trading conditions, but the unprecedented convergence of US tariffs, shifting customer inventory patterns, continued governmental wage regulations and a significant double-digit percentage year-on-year increase in wholesale butter prices impacted our bottom line.

“While the external trading environment remains both challenging and complex, particularly regarding geopolitical factors and sector-wide labour availability, we are managing this from a position of historic strength.

“We continue to focus on the areas within our control and driving operational efficiency and maintaining an unwavering investment in our brand and our people is of paramount importance and we remain highly confident in the future of the business.

“Above all, Walker’s will continue to operate as a sustainable, environmentally conscious, family owned and managed business, based in the Highlands, with continued dedication to baking and bringing our finest quality produce to our much valued and loyal consumers.”