Associated British Foods (ABF), owner of the Mazola brand, has reported a shrinking US cooking oil market, attributing the decline to economic and immigration enforcement pressures on Latino households. George Weston, ABF's chief executive, told City analysts that cooking oil sales have been negatively impacted as Hispanic consumers, who are heavy users of the product, face financial strain and pressure from Immigration and Customs Enforcement (ICE) raids.
Hispanic consumers under financial and ICE pressure
Weston noted that anti-immigration raids championed by Donald Trump have disproportionately affected Latino communities, prompting some consumers to switch to online shopping and reuse 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," Weston said. He added that this trend is unlikely to change into 2027.
Impact of GLP-1 drugs on foodservice demand
Weston also highlighted that Stratas Foods, ABF's US joint venture supplying oils to the food service sector, is being affected 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.
ABF's overall performance and Primark spin-off
The group's total sales rose 3% to £5.3bn in the quarter, with Primark sales up 3% once exchange rate changes were removed, offsetting a 4% slump in sugar sales and a 14% slump in agricultural supplies led by animal feed. ABF, which is planning to spin off Primark into a separate listed company, noted "a challenging consumer environment across most of our markets."
Asda job cuts and financial struggles
Meanwhile, Asda, the UK's third-largest supermarket, revealed it cut almost 6,000 jobs last year after selling the Leon food business and reducing its technology team. The job cuts amounted to about 4% of Asda's workforce, leaving it with almost 137,000 employees by December last year. The cuts included more than 4,600 roles in stores, distribution, and grocery buying, as well as over 1,000 head office roles. Asda said most job losses were due to not replacing staff after departures or after the sale of Leon, and the ending of IT contracts as it wound up "project future," the shift away from Walmart's systems.
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 struggling to turn around its business after a £6.8bn takeover in 2020 by TDR Capital and the Issa brothers. Recent figures show Asda slumped to a near £1bn loss last year after starting a supermarket price war and spending £284m more on project future, bringing total spending to about £1.2bn.
