UK sandwich retail chain Greggs has reported a 2.8% rise in group like-for-like sales since the start of the second half (the 19 weeks to 29 October 2005).
“After an increase in the first six weeks to 30 July of 3.0%, as already reported, sales trends improved slightly for a period with the onset of more favourable weather. However, this has been more than offset by poorer performance in recent weeks,” said group managing director Sir Michael Darrington.
He added that trading conditions have proved less positive than the company expected at the time of its interim results announcement in August, mainly due to the weakness of the retail market. This is resulting in lower footfall on the high street, which is affecting both the company’s brands but having a greater impact on Bakers Oven, whose format is more exposed to the effects of reduced consumer traffic.
“Energy costs have risen, as expected, but we are taking action across the group to control all our variable costs in the light of the more challenging sales environment,” Darrington said.
Greggs also said profits in the second half to date remain below budget and the level of last year, with the final outturn for the period depending on performance in the weeks ahead, and particularly over the Christmas period.
“However, given the good first half, I believe that we will make modest progress over the year as a whole,” Darrington added.
So far this year Greggs has opened a net 49 new shops, taking it to a total of 1,312 at 29 October. Further openings are scheduled before Christmas, with approaching 60 net openings expected over the year as a whole.
“This is ahead of our stated targets and reflects our confidence in the long term prospects for the group,” Darrington said.
Go deeper with GlobalData
