GREGGS stepped up its attack on the government’s proposals to add VAT to all hot takeaway food, warning they would make a “material impact” on sales and profits at the chain, sending shares falling four per cent yesterday.
Chief executive Sam McMeikan said a change in the VAT levy would have a “disproportionate impact on the specialist bakery sector” resulting in further unemployment and high street closures.
He said the company will put forward an alternative proposal to the Treasury that would see VAT charged on all food kept deliberately hot for sale after cooking or reheated to order, or kept warm in heat-retaining packaging.
The chain, which sells sandwiches, bread and pastries to six million customers a week, said sales at stores open more than a year fell 1.8 per cent in the 19 weeks to May, blaming the country’ s wettest April on record for the fall.
Total sales rose 4.3 per cent, boosted by new store openings and the success of wholesaling frozen products such as sausage rolls, that it is selling through supermarket chain Iceland.