Greggs sales slow amid ‘softer’ high street trading

Greggs' Loanhead bakery will close in the second quarter of 2017. Picture: Gordon Fraser
Greggs' Loanhead bakery will close in the second quarter of 2017. Picture: Gordon Fraser
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Sandwich chain Greggs, which earlier this year unveiled plans to close a Midlothian bakery, has seen its sales hit by tough conditions on the high street.

The firm is closing the Loanhead site, with the loss of more than 100 jobs as part of a £100 million investment in its manufacturing and distribution operations that will see it expand its Clydesmill bakery in Cambuslang to create a “centre of excellence” for Scotland.

Greggs said today that the Loanhead bakery will close in the second quarter of next year, with the shutters due to come down on a site in Twickenham before the end of this year.

The update came as the baker, which has more than 1,700 retail outlets, said like-for-like sales growth at its company-managed stores fell to 3.7 per cent in the first 18 weeks of its financial year, down from 6 per cent for the same period a year ago.

In a trading statement ahead of its annual meeting, Greggs said: “As has been widely reported, conditions on the high street were softer in March before recovering in recent weeks; these conditions were reflected in our own performance.”

But it insisted: “We have made a good start to the year. Input cost inflation remains low despite increased wage costs and, with a strong pipeline of product initiatives and plans to invest in our shops and supply chain, we expect to make progress in line with our previous expectations.”

Clive Black, analyst at Shore Capital, said: “We deem such a trading performance to be very robust indeed against what has been a demonstrably challenging backdrop for the majority operating on the UK high street, tough conditions that have also embraced the likes of Next.”

In the year to date, Greggs opened 43 shops – including 23 franchised units – and closed 21 outlets, giving it a total of 1,720.