Wet weather washes out Greggs sales

By PETER RANSCOMBE
Published on 05/08/2012 00:00

GREGGS is tipped to push ahead with its plans to open 90 stores this year despite wet weather during the spring putting a dampener on its interim results.

Sales at the Newcastle-based bakery chain, run by Scots-born chief executive Ken McMeikan, are predicted to have fallen by between 1.5 per cent and 2 per cent year-on-year since the middle of May, according to analysts at Shore Capital.

The last update revealed a 1.8 per cent fall in like-for-like sales in the 19 weeks to May and Greggs complained of six disappointing weeks amid the wet weather. Those trends are set to have continued into June when fresh downpours piled more pain on the UK’s beleaguered high streets, where most of Greggs’ 1,600 stores are based.

Shore Capital analyst Clive Black said: “While such wet weather may have boosted the warm savoury participation of Greggs’ mix, we cannot help but be concerned about the impact upon trade of generally low levels of activity.”

Black predicts underlying profits will be flat at £16.9 million. However, the group’s top-line sales growth is set to continue as it presses ahead with its store opening plans. Black thinks Greggs is on track to open 90 stores in 2012 as it eyes 2,000 outlets in the medium-term.

It is trialling stores in locations such as bus stations and service stations, as it looks to reduce its exposure to the high street. It is also testing Greggs Moment cafes, selling its products in Iceland supermarkets and opening bakery stores with a greater selection of bread and cakes.