Greggs fights off sales chill with one million mince pies a week

MASSIVE demand for festive savoury bakes fuelled a Christmas sales rise at Greggs, although icy pavements and sub-zero temperatures dented the bakery chain's trade in early 2010.

The group, whose near-1,400 shops include about 180 in Scotland, said yesterday that it sold one million mince pies a week in the four weeks to 26 December.

Like-for-like sales rose a relatively lacklustre 1.1 per cent in this period, but growth jumped to 4.4 per cent in the final week before Christmas.

However, Greggs' Scots-born chief executive Ken McMeikan said: "The severe winter weather across the country has naturally brought particular challenges at the beginning of 2010."

McMeikan said despite "these testing conditions" the group expected to report annual results in line with expectations.

The company said like-for-like sales over the year to 2 January rose 0.8 per cent, but this was against an equivalent 53-week trading period in the previous year.

Greggs said bespoke festive bake products did particularly well, alongside mince pie sales.

Before yesterday's trading update, City analysts were forecasting a consensus pre-tax profit of 46.7 million for 2009. This would be up from 45.2m in 2008.

The group said mince pie sales in the four-week Christmas period were boosted by the launch of a new Viennese version and rose 6 per cent on a like-for-like basis.

In Christmas week itself, the firm said it served 250,000 more customers than last year.

McMeikan said the firm had coped well in Britain's post-Christmas freeze, with only 15 of its shops having to temporarily close.

He said: "Inevitably it will have, for a very short period of time, some impact on sales, but it's not something that we're not able to plan for or able to manage."

Greggs, he added, was "pretty confident" of achieving sales growth this year, but there were concerns about expected tax rises after the coming general election as well as an increase in unemployment.

Analysts said the bakery group had proved among the most resilient on the high street to the downturn, partly due to relatively low transaction values.

James Wheatcroft, an analyst at Evolution Securities, said: "Growth opportunities will offset tough high street conditions."

Last year the bakery business detailed plans to open 600 more stores and create 6,000 jobs – with up to 60 new stores slated to open in 2010.

The company's shares, which have risen 15 per cent over the past six months, finished the session yesterday down 10p, or 2.4 per cent, at 405p.