Bakery chain Greggs blamed adverse weather and “challenging market conditions” for keeping high street shoppers at bay, resulting in a full-year profit slide of more than 2%.
The Newcastle-based group, which has more than 1,670 outlets across the UK, said the impact of a wet summer and the consumer recession led to a fall in pre-tax profits to £51.9 million in the year to December 29.
The retailer served freshly baked goods to an average of six million customers each week, increasing total sales to £735m.
Driven primarily by the opening of 121 new bakery stores during the year, this rise of 4.8% was also bolstered by a wholesale contribution that added 2.8% to the overall sales growth.
However, stripping out the new store openings, like-for-like sales fell 2.7%.
Chief executive Roger Whiteside, who took over at Greggs last month, said the introduction of new retail sales channels including through Iceland and Moto service stations had a good impact on figures.
However, there remained “no let-up” in pressure on consumers’ disposable incomes last year, which impacted upon high street figures.
“People are going out to shop less and making their money go further,” said Mr Whiteside.
The wet weather was a “significant deterrent” to shoppers, whilst January’s snow exacerbated disruptions resulting in the sales figure falling by 4% in the 11 weeks to March 16.
Mr Whiteside said: “Unlike most retailers we can never make those lost sales back.
“If someone stays in their office because it’s raining on Monday and so doesn’t buy a sandwich they are not going to buy two sandwiches on Tuesday to make up.”
Admitting Greggs sales figures remained under pressure after a dismal year for the high street, the CEO said he now plans to reshape the firm’s plans for this year.
Looking forward, Mr Whiteside said this will lead to increased investment in Greggs’ core estate, with stores refitted as “food on the go” outlets or given the new Greggs the Bakery format.
“Success in our new business channels, coupled with new shop openings, saw total sales growing again this year despite challenging market conditions,” said Mr Whiteside.
“At the same time we will continue to develop sales through new shop openings, and make further progress in new markets through our wholesale and franchise agreements,” he said.
The firm, which closed 21 stores last year, said it will return to a “more normal level” of around 50 to 60 new openings, net of closures, this year.
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