Bakery chain Greggs posted strong sales yesterday, but its shares took a hit as it revealed a sharp slowdown in the final quarter that included the warmest December on record.
Group chief executive Roger Whiteside said: “Q4 was more difficult than the rest. Footfall in shopping locations came under pressure and we saw that.”
Greggs, which is two years into a five-year turnaround plan to widen its offering to consumers from its staples of sausage rolls, pies and pizzas, said like-for-like sales lifted 4.7 per cent in the 52 weeks to 2 January.
But that rise slowed to 2.3 per cent in the fourth quarter, and shares closed more than 14 per cent lower yesterday.
Whiteside said: “It’s been another record year for Greggs. That’s two on the trot now.” He said 10 per cent of group sales were now “healthy” options, and that the breakfast and coffee offering was the fastest-growing part of the business.
Greggs, which has nearly 1,700 food-on-the-go shops nationwide including 235 in Scotland, opened 122 outlets in the year and closed 74. Whiteside said more than 80 per cent of its new stores were in the likes of travel and leisure locations as opposed to its traditional shopping location bias.
He said the public was still not totally aware that the company had branched out from its pure bakery credentials. “I think we still have a long way to go. Awareness of our new options is lower than it should be,” Whiteside added.
He said that he felt Greggs’s share price may have been hit because of some investors’ possible disappointment that the retailer’s latest performance had just met expectations rather than surpassed them. Despite this, Whiteside said: “The year has been transformational as was the year before and the year coming.”