Greggs, the bakery chain which won a U-turn from George Osborne over his pasty tax in last year’s Budget, is to slow new store openings amid falling sales and footfall on the high street
Greggs has cut plans for new store openings this year after a dip in like-for-like sales Photo: PA
By Graham Ruddick12:21PM GMT 20 Mar 20135 Comments
The Newcastle-based company said that like-for-like sales fell by 2.7pc in the 52 weeks to December 29, 2012, sending pre-tax profits down from £60.4m to £53.3m.
The decline in like-for-like sales has accelerated since the turn of the year to 4pc, with sales in January down by 5.7pc as snow fell across the UK.
Greggs, which has 1,671 shops, relies on footfall in the high street to drive sales and is under pressure from cautious consumer spending.
Roger Whiteside, the former boss of Punch Taverns who took over from Ken McMeikan as chief executive last month, said the company plans to “reshape” its investment this year.
The amount of new store openings will halve compared to 2012 to 50, but refurbishments will double to 250 as Greggs rolls out its “food on the go” and “bakery” formats.
Mr Whiteside said Greggs also plans to spend more on promotions after the success of its meal deal offers. The company’s breakfast deal of a bacon or sausage roll with a hot drink for £2 was Greggs’ most popular product in 2012, with seven million sold.
However, despite the slowdown of new store openings, Mr Whiteside said he plans to press-ahead with the strategy laid out by his predecessor, which includes selling frozen Greggs products in Iceland.
“My impact will be on pace of delivery and the detail,” Mr Whiteside, who has served as a non-executive director at Greggs for the last five years, said.
Shares in the company fell 32.20, or 6pc, to 491.30p following the results.
Greggs will pay a final dividend of 13.5p, the same as last year, on May 24.