Member Article

Greggs bakery sales take a hit

Bakery chain Greggs reported a dip in sales over Christmas and New Year, following the exit of chief executive Ken McMeikan at the beginning of December.

The North East-founded company said it had shown “resilience” during the period, given that in 2011, Christmas and New Year offered a “favourable trading pattern”, each having fallen on a weekend.

Total sales in the five weeks up to 5th January increased by 4.3%, however this came to a 2.9% drop like-for-like in comparison with a 5.1% rise the previous year. Greggs reported a similar picture for the year as a whole, with a total sales increase of 4.8%, while like-for-like sales fell 2.7%.

Despite disappointing results, the bakery celebrated a record year for store openings, with 100 new shops on the UK high street.

New formats of “Greggs the Bakery”, which offer fresh bread and made to order sandwiches, are to be expanded in the coming year, and Greggs said it will refit between 200 and 300 stores while a net of 50 to 60 new stores will be opened.

Sales of the company’s “Bake at Home” range, which is sold in Iceland supermarkets, were strong and 11 products are now available in this line.

Greggs predicted a “tough trading environment” into the next 12 months, and highlighted inflation and consumer caution as key pressures on their results.

Chief executive Ken McMeikan, who will move to a new position at Brakes Group when a replacement is found, commented: “During the year we opened a record 121 new shops and delivered a net increase of 100, after 21 closures, to give us a total of 1,671 shops at 29 December 2012.

“We anticipate that we will report full year results broadly in line with expectations when we make our preliminary announcement on 13 March 2013.

“Having built strong foundations in 2012 for our multi-channel approach, we are well placed to drive further sales growth in the year ahead.”

This was posted in Bdaily's Members' News section by Miranda Dobson .