Greggs warns on profits
High street bakery chain Greggs has warned that profits are likely to be lower than expected this year after reporting a 4.4% fall in its like-for-like sales in the 17 weeks to 27 April 2013.
The retailer said sales had been impacted by adverse weather conditions in the period and by the continuing reduced footfall in many of its stores, although there had been a marginal increase in transaction values.
However, there was a slight improvement in the last two weeks of the period with like-for-like sales down by 1.5%.
Total sales grew by 3% in the 17 weeks driven by the retailer’s shop opening programme and the continued development of wholesale and franchise sales, which contributed 2.9% to overall sales growth.
Never Miss a Retail Update!Greggs opened 18 new shops in the period and closed eight to give a total of 1,681 shops at 27 April. The new stores included six franchised units with Moto Hospitality at motorway service stations as openings focused on locations that were less impacted by lower footfall such as workplaces, travel and leisure destinations.
The retailer also completed 59 shop refurbishments in line with its plan to refit around 250 shops during 2013.
In a statement Greggs said: “We do not expect a significant improvement in the difficult underlying market conditions in the short term. The business is focused on continuing with our plans to invest in core sales performance whilst taking action to reduce costs. Although we are only four months into the year, based on current own shop like-for-like performance we believe that profits for the year are likely to be slightly below the lower end of the range of market expectations.
“We continue to make progress with our strategic plan which we are evolving to position the business for long term growth and to develop the Greggs brand.”
