Turnover up, but profits down: The highs and lows for Scotland’s 125-year-old shortbread producer

By Gill Hyslop

- Last updated on GMT

It is traditional in Scotland to give 'first footers' shortbread at New Year. Pic: GettyImages
It is traditional in Scotland to give 'first footers' shortbread at New Year. Pic: GettyImages

Related tags Walker's Shortbread Scotland shortbread Profit turnover Export COVID

Walker’s Shortbread has seen turnover rise in the past financial year - signalling a whetted interest for the ‘medieval biscuit bread’ post-pandemic - but pressures on global supply chains, the conflict in Ukraine and a challenging inflationary environment caused profits to dip.

For the year ended 31 December 2022, Walker’s Shortbread posted a 16% boost in annual turnover and a near 25% plummet in profits (at pre-tax level).

A challenging inflationary environment, which saw the costs of raw materials soaring and service levels squeezed, as well as ongoing pressures on global supply chains - intensified by the conflict in Ukraine - hit the family-owned company’s bottom line, despite strong growth both at home and in the US.

The Speyside-based business reported a significant fall in profits - from nearly £6.8m in 2021 to £5.1m.

Turnover, however, soared by £22m - from £142.4m to £164.6m - boosted by increased sales in domestic and overseas markets, the latter from a strong post-pandemic festive season. In fact, UK sales rose by 23% to £77m from £62.6m previously, while export revenue grew nearly 10% to £87.6m. The company’s products are sold in 100 markets.

“It was pleasing to see demand return in a substantial way through 2022 after a couple of challenging years during the Covid-19 pandemic,”​ said Nicky Walker, MD, Walker’s Shortbread.

Walker's Nicky Walker
Nicky Walker

‘Exceptionally well received’

Growth was underpinned by Walker’s rebrand - which launched in 2021 and continued through 2022, with strong performance in global travel retail coinciding with a return to air travel for many passengers.

“The Walker’s brand relaunch was exceptionally well received last year,​” added Walker.

“We are excited at the prospect of the continued roll out through the remainder of this year and into next as we look forward to support the business’ aspiration for sustainable growth.”

Operating profits remained more or less flat. The business sought to mitigate the current challenging landscape by introducing new production efficiencies and procurement strategies, both which contributed gains in the year, however, it was insufficient to mitigate the cost pressures in full meaning profits remained static at £6m. 

“The year presented numerous hurdles however, not least the continuing restrictions in the local labour market, but also substantial price increases coming from our suppliers,”​ said Walker.

“This volatility forced a review of all our incoming costs, with proactive conversations held with our entire supply chain.”

Bright, sustainable future

Walker's shortbread

Petticoat Tails shortbread Getty
Pic: GettyImages

Shortbread’s origins start as a biscuit bread in medieval times, made from leftover dough from bread making and dried out to form a type of rusk. Over time, the recipe changed - replacing yeast with butter - making it more popular but also more expensive, relegating it as a special treat reserved for special occasions. In Scotland, it is still offered to ‘first footers’ at New Year (the first person to enter a house and seen as a bringer of good fortune - or misfortune - for the coming year).

Mary, Queen of Scots, was particularly fond Petticoat Tails, a crisp, buttery shortbread flavoured with caraway seeds, cut into triangles that fit together into a circle to echo the shape of the pieces of fabric used to make a full-gored petticoat during the reign of Elizabeth I.

Challenges aside - which no doubt will continue into 2024 - Walker said the 125-year-old company is looking forward to “a bright, sustainable future”.

“I’d again like to acknowledge the support of our incredible team, whose efforts are invaluable to the business. It was especially pleasing that as part of our 125th​ anniversary celebrations in June, we were able to say thank you to them in person, along with their families, at a company event.”

Advent calendar

Walker's advent calendar

Walker's Shortbread has unveiled its limited edition 2023 advent calendar, which it expects to sell out fast.

This year’s calendar (RRP £19.99) pays homage to the town of Aberlour in the Scottish Highlands, with festive scenes of the River Spey, Walker’s shortbread factory and shop (the original bakery) on Aberlour High Street. Treats within are shaped as Christmas trees, sleighs, a snowman and even a Highland cow, all dressed in Walker’s heritage tartan.

“At Walker’s Shortbread, we’re proud to have played an important part in Christmas celebrations for the past 125 years,”​ said Walker.

“There is no better time to enjoy our delicious shortbreads, festive pies and other Scottish delicacies.

“Over the years we’ve expanded our festive range, bringing new seasonal shapes and variations to customers around the world which surprise and delight, with products to suit a variety of needs and occasions – from stocking fillers to luxurious gifts and self-treat options. Our advent calendars have proven popular among consumers and we’re excited for this year’s calendar to feature in homes across the UK this Christmas.”

Walker's Shortbread's roots began as a village bakery in Aberlour in 1898. The great grandchildren of Joseph Walker have retained his tradition of fine baking and the founder’s personal guarantee can still be found on every pack of shortbread, biscuits, cakes and oatcakes to confirm they follow the original recipes and use only the finest ingredients obtainable, such as creamery butter from grass fed cows.

This policy has earned the company an impressive reputation.

In 2017, Walker’s Shortbread was granted a Royal Warrant of Appointment from Her Majesty the Queen for the supply of shortbread to the Royal Household, following a similar order by the Queen and Queen Mother in 2002 for oatcakes. The company is also a four-times winner of the Queen’s Award for Export Achievement, with products sold in 100 countries worldwide.

All Walker’s products are certified Kosher (OUD), are suitable for vegetarians and use no artificial colours, flavourings or preservatives.

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