Member Article

Weather puts the dampener on Greggs sales

High street baker Greggs has reported like-for-like sales are down on last year, owing to a rainy start to the summer.

Sales fell by 3.5% in the second quarter and by 2.3% in the first half overall, as UK high street footfall was down by 7%, according to the British Retail Consortium.

The fall resulted in a £0.8m decline in first half profits for the chain, which opened 33 net new shops in the period.

Chief executive, Kennedy McMeikan, said: “Our total sales growth of 4.5 per cent reflects the good performance from our new shop opening programme and strong growth in wholesale volumes.

“The market remained challenging and was particularly impacted by the record levels of rainfall in the second quarter with UK High Street footfall down over 7%. Greggs was not immune to this and our like-for-like sales fell by 3.5 per cent in the second quarter and by 2.3 per cent in the first half overall.

“Our tight control of costs and the added contribution from wholesale partially mitigated the profit impact, resulting in a £0.8 million (4.5%) decline in first half profits.

“Conditions for consumers are likely to remain challenging in the second half and we will therefore continue our focus on delivering outstanding value for our customers. In addition we will make the Greggs brand more accessible to new customers through our shop opening programme and further development of our wholesaling and franchising channels.

Greggs opened 39 new shops during the first half of the year, and closed six, bringing the total number of outlets to 1,604.

The chain has recently innovated with the ‘Greggs Moment’ format, of which the company has four, with a fifth shop to be opened this week.

In June the latest of the Gregg’s concepts was launched in Newcastle. ‘Greggs the Bakery’ aims to give customers a more traditional baker’s shop, with a wide range of breads and made-to-order sandwiches.

A range of nine frozen Greggs products have been made available through Iceland stores, adding to sales.

Elsewhere, two franchised stores have been opened in partnership with Moto service stations, and now the company plan to roll out a further 28 outlets in this format.

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This was posted in Bdaily's Members' News section by Tom Keighley .