Greggs shares fall as it warns on flakey profit

Kasmira Jefford
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GREGGS’ shares went stale yesterday after the bakery chain issued a surprise profit warning, blaming the cold weather and shoppers cutting back on high street spending for a worse-than-expected fall in sales.

Chief executive Roger Whiteside said the January snow, combined with tough trading conditions, meant that profits for the year are now likely to be slightly below the lower end of the £47.5m to £55.2m forecast range.

Like-for-like sales fell 4.4 per cent in the 17 weeks to 27 April, though they improved in the past two weeks, declining 1.5 per cent, thanks to easier comparatives against last year.

“We are not putting this all down to the weather,” Whiteside said. “We are seeing fewer customers out shopping...consumer income remains under pressure and people are trying to save money.”

Higher demand for promotional deals also hit margins, a trend Whiteside said is likely to continue.

Total sales across its 1,681 shops grew three per cent, driven by 18 new shop openings and its wholesale contract supplying Greggs frozen products to Iceland supermarkets.

The company has been opening new stores in areas less impacted by lower shopper footfall such as workplaces, travel destinations, including its franchises with Moto service stations.

It is also revamping 250 shops this year in a bid to stem its sales decline.