Greggs warns that like-for-like sales will remain weak this year
In the 14 weeks to 6 October, total sales increased by 5.9% driven by a new shop opening programme and continued success in wholesaling and franchising. The company said its ‘Bake at Home' sales through the Iceland frozen food chain continued to perform strongly as did the new motorway services shops opened in partnership with Moto.
The company opened 70 new shops in the year to date, which was ahead of expectations.
Greggs said the decrease in like-for-like sales was an improvement on the 3.5% decline seen in the second quarter but added that the recovery was smaller than expected.
The company said in a statement: "Consumers continued to show restraint in their spending and the adverse weather in July, followed by flooding in parts of the country at the end of September, also impacted sales in the period."
Although Greggs remains cautious about the economic outlook, the company said its total sales would continue to benefit from its new shop opening programme and expansion in wholesaling and franchising. However, it expects consumers to continue showing restraint and now expects like-for-like sales to remain negative in the final quarter.
Greggs plans to mitigate the impact of this lower like-for-like sales performance through tight cost control and an increased profit contribution from wholesaling and franchising.
The company added: "We are making the Greggs brand more accessible to customers through our new shop openings and wholesaling and franchising channels and this underpins our strategy to deliver long-term profitable growth for the benefit of shareholders, employees and the wider community."
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