The US cooking oil market is shrinking and unlikely to improve soon because of economic and immigration enforcement pressures on Latino households, the owner of the Mazola brand has said.
George Weston, the chief executive of Associated British Foods (ABF), told City analysts that cooking oil sales had suffered as “our heavy use consumer is that Hispanic population who are under financial pressure, who are under pressure from Ice [Immigration and Customs Enforcement] and are feeling a bit miserable”.
Anti-immigration raids championed by Donald Trump have disproportionately affected Latino communities, prompting some consumers to switch to online shopping. Weston said Hispanic customers were also reusing cooking oil more frequently.
“Typically that population will be using oils three times before they throw it out, we think it’s gone to four in many cases,” said the boss of ABF, which also owns brands such as Twinings, Kingsmill and the fashion retailer Primark. “We don’t think that that’s going to change into 2027.”
Weston also said Stratas Foods, ABF’s US joint venture supplying oils to the food service sector, was being hit by the rapid uptake of appetite-suppressing drugs. “We are undoubtedly seeing the consequences of GLP-1s on foodservice demand, particularly for fried food,” he said.
ABF’s overall grocery sales rose 1% in the three months to 20 June, with lower US oils sales offset by growth in brands such as Twinings.
The group’s total sales rose 3% to £5.3bn in the quarter with sales at Primark up 3%, once the impact of exchange rate changes was removed, offsetting a 4% slump in sales of sugar and a 14% slump in agricultural supplies led by animal feed.
ABF, which is poised to hive off Primark into a separate listed company, pointed to “a challenging consumer environment across most of our markets”.
Also under pressure is the UK’s third-largest supermarket, Asda, which revealed this week that it had cut almost 6,000 jobs last year after it sold off the Leon food business and reduced its technology team after largely completing a revamp of its IT systems.
The job cuts amounted to about 4% of Asda’s workforce, leaving it standing at almost 137,000 by December last year. They included more than 4,600 roles in stores and in Asda’s distribution and grocery buying arm as well as more than 1,000 head office roles.
Asda said most of the job losses did not involve making people redundant but rather were a result of not replacing staff after they had left or after the sale of the Leon restaurants. Others left the payroll after the ending of IT contracts as it began to wind up “project future”, the complex shift away from using systems provided by its former majority owner Walmart, the US retailer.
An Asda spokesperson said: “We have continued to invest in our colleagues, including pay increases, and maintained higher store hours year on year to support a strong in-store experience.”
Asda is battling to turn around its business after a £6.8bn takeover in 2020 by the private equity firm TDR Capital and the Issa brothers, two Blackburn-based billionaires.
Recently published figures show Asda slumped to a near £1bn loss last year after it kicked off a supermarket price war and spent £284m more on project future, taking the total spent to about £1.2bn.
