By Scott Wright

WALKER’S Shortbread has declared that staff recruitment remains “very difficult” and trading with the European Union has become more costly since Brexit, as it reported a “strong response” to the pandemic.

New accounts for the Aberlour-based baker, which exports to more than 100 countries, show profits more than doubled to £6.2 million in the year to December 31, boosted by strong demand in key markets.

The family-owned company, which was founded by Joseph Walker in 1898, cited the return to a “degree of normality” following the disruption brought by Covid in 2020 as turnover increased to £142.4m from £132.4m. There was growth at seasonal festive markets at home and abroad, with export revenues rising to £79.8m from £72.6m.

The increase in profits and revenue came despite the continuing impact of the pandemic and various supply-chain difficulties.

Lockdowns at several major ports around the world towards the end of last yer led to increased costs and delays for in-bound raw materials and outbound finished goods, while the prices of commodities such as butter soared, Walker’s noted.

And, speaking to The Herald, director Jim Walker said the company was continuing to find it hard to secure staff in its hometown and the surrounding area.

The company, which has previously cited Brexit as a key contributor to staff shortages, is facing a shortfall of around 200 staff at peak times.

The accounts show Walkers employed an average of 1,252 people in 2021, compared with 1,331 the year before.

Mr Walker said: “This summer and last summer, we were really about 200 people short, both years. Our existing workforce have done their best to work longer hours and [at] weekends. We have put on night shifts where necessary. But it has been very difficult.

“[It is] just a shortage of labour and I think all food manufacturers are in a similar situation, as are hotels.

“We have got lots of hotels up here [which] just can’t get staff, particularly in a small environment like this. There is not a big population. In the past few years there has been no unemployment – [it has been] next to nothing.”

Mr Walker said the shortbread maker is continuing to encounter supply-chain difficulties this year, with the fall-out from Russia’s war on Ukraine pushing up the global price of wheat flour and energy costs.

“Almost every commodity has gone up in price dramatically,” he said. “It has been very tough.”

As well as supply-chain upheaval, the company highlights in its accounts the impact of Brexit. The directors state: “While the ‘Trade and Cooperation Agreement’ that came into effect on January 1 2021 guarantees tariff and quota free access to the European Union, the administrative burden imposed is significantly greater than what went before and inevitably led to an increase in costs.”

Despite the challenging backdrop, Mr Walker said underlying demand for the company’s products has “remained firm”.

He said: “In difficult times, sometimes people will gravitate to a trusted brand. We have been fortunate there. We are hoping that by another year sales will come back to at least pre-Covid levels. Profitability will take a few years to recover.”

Meanwhile, Mr Walker noted that there had been a “generational change” at Walker’s in the last year.

Joe Walker, brother of Jim Walker and a former joint managing director, passed away last October, and the company acknowledged yesterday the “immeasurable contribution made over his 66 years of service to the business.”

Nicky Walker, son of Joe Walker, was appointed managing director in January, while there are also senior roles within the business for Jim Walker’s two daughters, Jacqui, who is head of international sales, and Bryony, head of commercial strategy.

Mr Walker, who said he is “in the process of slowing down”, noted: “I think we are in good enough shape, as well as one can confidently predict. I’m happy about where we are in the company. We have good non-family people as well just to give us the support we need.”

He added: “I’m never overly confident. As a company, we are quite careful, but we are well enough funded and hopefully in a comfortable position.”