A supplier of sausages and bacon to supermarkets today warned that attempts to pull in hard-pressed consumers by slashing its prices would squeeze the business this year.

Cranswick, which supplies the Jamie Oliver brand as well as Sainsbury's and Tesco, reported a 10pc jump in sales in the three months to March 31 across all its products.

But the group, which has a base in Watton, said while lower pricing in the period had boosted volumes it would squeeze margins this year.

Cranswick bought the Bowes production facility in Watton for �17.2m in 2009 and renamed the operation Cranswick Country Foods.

Cranswick Country Foods was awarded a grant of �408,250 from Defra for a sausage factory last year.

That has seen 71 staff taken on which is due to rise to 86 when the new venture reaches full production. The grant was used to upgrade existing premises and to construct a new unit for five production lines allowing Cranswick to expand their business in Norfolk and produce a range of pork sausages packaged and distributed in East Anglia with pork supplied by 17 local farms.

Elsewhere, Cranswick said it had sold its 49pc stake in cooked meats business Farmers Boy to the joint-venture's partner supermarket Morrisons.

Cranswick said it had delivered a range of 'competitively priced' products for 'hard pressed, financially constrained consumers'.

But it added: 'While driving volumes, this has had some impact on operating margin which, notwithstanding some recovery as the year progressed, will, as expected, be below that achieved in the previous financial year.'

The group hailed a �20 million investment drive during the year to deliver new product ranges.

Cranswick last year warned soaring pig-feed prices were hitting the business and issued a profits warning for the full year.

The company reported sales of �758m and pre-tax profits of �47.1m in the year to March 2011.

Shares in Cranswick were nearly 1pc higher after today's update.