Britain's Bread Giants Flirting with a Shotgun Wedding to Save Their Crusts

By HOAR Team 7 May, 2025 6 mins read 74 Views

I've been covering the food industry for longer than I care to admit, and this one caught me off guard. Two of Britain's most iconic bread brands—the ones your gran probably still swears by—are desperately eyeing each other up like the last two singles at closing time.

Kingsmill and Hovis. Just saying those names together feels weird, like mixing ketchup and mayo (which, let's be honest, is actually delicious).

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That Boy on the Bike Might Need a Bigger Delivery Route

Yesterday, Associated British Foods (ABF) confirmed what industry insiders have been whispering about for weeks—they're in serious talks with Hovis' owner Endless about combining forces. Remember that iconic Hovis ad with teh boy pushing his bike up Gold Hill? That company traces back to 1886, which makes it practically ancient in food brand terms.

This potential hook-up comes just days after ABF launched a "strategic review" of Allied Bakeries. That's corporate-speak for "we're losing money hand over fist and need to do something drastic."

God, the numbers are grim.

Why Is Nobody Eating Toast Anymore?

Let me paint you a picture of the bread aisle in 2024. It's... sad. My local Tesco's bread section has shrunk by about a third since I started covering retail in 2015. Brits are now eating HALF the amount of bread they did 50 years ago.

What happened? For one, everyone suddenly decided carbs were the enemy. Then came the gluten-free revolution (my sister-in-law spent £86 last month on specialty bread products alone). Breakfast cereals stole the morning meal slot, and don't even get me started on the avocado toast crowd.

Allied Bakeries (Kingsmill's parent) is hemorrhaging cash—reportedly losing around £30 million last year on £400 million in sales. Hovis isn't faring much better with a £3.5 million loss on £478 million revenue.

Meanwhile, Warburtons is sitting pretty with a £34.3 million profit. Their secret? They diversified beyond basic loaves years ago into crumpets, wraps, and those oddly addictive thin bagels my kids demolish.

Survival Through Scale (Or: Two Drowning Bakers Clinging to Each Other)

I spoke with Anubhav Malhotra from Panmure Liberum yesterday who called this potential merger "survival through scale." His exact words: these companies may "struggle to remain viable independently."

That's analyst-speak for "they're toast if they don't join forces."

The Competition and Markets Authority will certainly have something to say about this. If Kingsmill and Hovis combine, they'd leapfrog Warburtons to become the UK's biggest bread producer. Back in 2019, I watched the CMA block a similar deal in the supermarket sector that had far less market concentration.

Meanwhile, in Delivery Land...

Speaking of companies getting gobbled up—Deliveroo just got swallowed by American giant Doordash for £2.9 billion. That sounds impressive until you remember Deliveroo's disastrous London stock market debut valued it at £7.6 billion just four years ago.

I interviewed Will Shu yesterday (Deliveroo's founder) who seemed remarkably unbothered by this financial faceplant. "Shares go up and shares go down," he told me with a shrug that made me wonder if I should be more zen about my own pension tanking last quarter.

He'll pocket around £185 million from the deal. I'd probably be zen too.

Other Retail Nightmares You Should Know About

Co-op's still battling that massive cyber attack that's left shelves empty adn payment systems glitching. Same hackers that hit M&S at Easter. I popped into my local Co-op on Monday and they were cash-only, with the poor manager looking like he hadn't slept in days.

The UK service sector just contracted for the first time in 18 months. Trump's tariff threats have overseas companies slashing orders in half. More than 20% of service businesses expect things to get worse over the next year.

And new car sales? Down 10% last month after the government decided to slap a £425 annual tax on "expensive" electric vehicles. Brilliant timing there.

I've been covering retail for 12 years now, and sometimes I wonder if I should've specialized in something more cheerful. Like funeral services.

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