Sales up at Greggs but it warns on year ahead
Published:  09 August, 2011

Greggs, the high street baker that specialises in sausage rolls, has warned that trading in the second half of the year will not alleviate the “tougher consumer spending environment”.

The company, which operates more than 1,500 stores across the country, saw sales improve by 4.2% to £355m, up from £321m, off the back of an extensive opening programme.

However, some store sales were flat – with just a 0.4% increase in like-for-like sales.

Operating profit excluding exceptional items was down £1.2m to £17.3m (2010: £18.5m) and the retailer said its underlying operating profit increased slightly by £0.8m to £19.3m before a £2m impact of additional public holidays.

Ken McMeikan, chief executive of the north east-based business, said: “Trading conditions have proved to be more challenging than we had expected and we do not anticipate that the second half will bring any alleviation of the tougher consumer spending environment, with disposable incomes remaining under pressure. We continue to experience substantial increases in commodity prices and are continuing to work hard to mitigate the impact on customers through business efficiencies and targeted promotional activity.

“Our total sales will benefit from our shop opening programme and we believe that marginally positive like-for-like sales growth over the year as a whole is achievable. Our performance to date in these difficult trading conditions confirms our confidence in Greggs’ ability to deliver long-term profitable growth for the benefit of shareholders, employees and the wider community.”

>> Greggs goes to Iceland

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