UK: Rain and snow takes toll on sales at Greggs
- Credit: PA
BAKERY chain Greggs admitted today that its sales remained under pressure after a dismal year on the high street left annual profits 2% lower.
The group, which has more than 1,670 outlets, blamed the impact of the wet summer and consumer recession for the decline to £51.9million in the year to December 29.
Sales were 2.7% lower on a like-for-like basis and Greggs said it had fared no better in the new financial year, with January’s snow disruption resulting in the sales figure falling by 4% in the 11 weeks to Saturday.
It plans to increase investment in its core estate, with stores refitted as “food on the go” outlets or given the new Greggs the Bakery format.
Roger Whiteside, who took over as chief executive last month, praised the chain’s resilience and said the good performance of newly-opened shops meant overall sales were still 4.8% higher at £735 million in the year.
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He added: “The weather was particularly poor during the year, which was the second wettest in the UK since records began.
“This was a significant deterrent to the frequent shopping trips that are a particular feature of a daily purchase business like Greggs.”
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Greggs has already started to diversify its estate to locations such as retail and industrial parks, motorway service stations and travel hubs.
It opened 121 new shops last year and completed 118 shop refurbishments, while closing 21 stores. The company said it will return to a “more normal level” of around 50 to 60 new openings, net of closures.
Despite the impact of the tough trading conditions, N+1 retail analyst Sahill Shan said the company was moving in the right direction strategically.
He added: “Greggs management has done a good job in a difficult and challenging market. The problem is that the market doesn’t look like getting any less challenging in the near term.