Greggs to scale back as wet weather trims profits

BAKERY chain Greggs slimmed down its expansion plans yesterday after last year’s washout summer left full-year profits down 2 per cent.

The group, which has more than 1,670 outlets, said it was reshaping investment plans, halving the number of stores it plans to open and instead spending more on refitting and rebranding its existing outlets.

Newcastle-based Greggs has already started to diversify its estate to locations such as retail and industrial parks, motorway service stations and travel hubs. It opened 121 shops last year and completed 118 refurbishments, while closing 21 stores. The firm said it will return to a “more normal level” of around 50 openings, net of closures.

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As well as bad weather, which is still causing problems for the firm, the ongoing squeeze on consumer spending power also contributed to its fall in profits, to £51.9 million in 2012.

Sales were 2.7 per cent lower on a like-for-like basis and Greggs said it had fared no better in its current financial year, with snow resulting in the sales figure falling by 4 per cent in the 11 weeks to last Saturday.

It plans to increase investment in its core estate, with stores refitted as “food on the go” outlets or given the new Greggs the Bakery format.

Roger Whiteside, who took over as chief executive last month, praised the chain’s resilience and said the good performance of newly-opened shops meant overall sales were still 4.8 per cent higher at £735m in the year. He added: “The weather was particularly poor during the year, which was the second wettest in the UK.”