Associated British Foods (ABF), the owner of the Mazola brand, has reported a contraction in the US cooking oil market, attributing the decline to economic and immigration enforcement pressures on Latino households. Chief executive George Weston told analysts that the Hispanic population, a key consumer base for cooking oil, is under significant financial strain and facing heightened scrutiny from Immigration and Customs Enforcement (Ice).
Impact on consumer behavior
Weston noted that anti-immigration raids championed by Donald Trump have disproportionately affected Latino communities, leading some consumers to shift to online shopping. Additionally, Hispanic customers are 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,” Weston said. He added that this trend is expected to persist into 2027.
Broader market challenges
ABF’s US joint venture, Stratas Foods, which supplies oils to the food service sector, is also being impacted by the rapid uptake of appetite-suppressing drugs. “We are undoubtedly seeing the consequences of GLP-1s on foodservice demand, particularly for fried food,” Weston stated. Despite these headwinds, ABF’s overall grocery sales rose 1% in the three months to 20 June, with growth in brands like Twinings offsetting lower US oils sales.
Financial performance
The group’s total sales increased 3% to £5.3bn in the quarter. Primark sales rose 3% after adjusting for exchange rate changes, counterbalancing a 4% slump in sugar sales and a 14% decline in agricultural supplies, led by animal feed. ABF, which plans to spin off Primark into a separate listed company, described “a challenging consumer environment across most of our markets.”
Asda job cuts
Separately, Asda, the UK’s third-largest supermarket, revealed it cut almost 6,000 jobs last year, representing about 4% of its workforce. The reductions followed the sale of the Leon food business and a reduction in its technology team after largely completing an IT systems overhaul. Asda said most job losses resulted from not replacing staff after departures or after the Leon sale, rather than redundancies. 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 recover after a £6.8bn takeover in 2020 by TDR Capital and the Issa brothers. The company reported a near £1bn loss last year after initiating a supermarket price war and spending £284m more on its IT transformation project.
