Greggs profit hit by summer rain
Bakery retailer Greggs has reported a fall in profits as the unseasonably wet weather in its second quarter led to a drop in like-for-like sales.
Pre-tax profit was down £0.8 million to £16.5 million in the 26 weeks to 30 June. While total sales increased by 4.5% to £350 million driven by new shop openings and growth in wholesale volumes, there was a 2.3% fall in the company’s like-for-like sales.
Greggs said in a statement: “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% in the second quarter and by 2.3% in the first half overall.”
The company, which operates 1.600 outlets across the UK, opened 33 new shops in the period and said it is on track to open a net 90 during the year. It will also expand its Motorway services shops to 30 Moto sites creating an additional 500 jobs.
Greggs said its tie up with Iceland Foods had resulted in sales “exceeding expectations”.
Regarding the outlook Greggs added: “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.
“We continue to make strong progress towards our strategic goals and remain confident in our ability to deliver long term profitable growth for the benefit of shareholders, employees and the wider community.”
