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Greggs like-for-like sales down over Christmas as tough trading bites Greggs like-for-like sales down over Christmas as tough trading bites
(about 2 hours later)
Greggs, the high street baker and sandwich shop, has become the latest retailer to be hit by the stuttering economy despite selling 8.5m mince pies over Christmas.Greggs, the high street baker and sandwich shop, has become the latest retailer to be hit by the stuttering economy despite selling 8.5m mince pies over Christmas.
The chain said sales in stores opened more than a year were down by 2.9% over Christmas, which the company blamed on having to compare its performance with a stellar period last year when like-for-like sales rose by 5.1%. For the full year, like-for-like sales were down 2.7%.The chain said sales in stores opened more than a year were down by 2.9% over Christmas, which the company blamed on having to compare its performance with a stellar period last year when like-for-like sales rose by 5.1%. For the full year, like-for-like sales were down 2.7%.
The chief executive, Ken McMeikan, who is set to leave the company to join private equity-owned catering suppliers Brakes, attempted to add a glaze to the numbers and insisted: "This is a resilient Christmas and new year trading performance given the tough comparison versus last year when we had a particularly favourable trading pattern with Christmas Day and New Year's Day falling on Sundays."The chief executive, Ken McMeikan, who is set to leave the company to join private equity-owned catering suppliers Brakes, attempted to add a glaze to the numbers and insisted: "This is a resilient Christmas and new year trading performance given the tough comparison versus last year when we had a particularly favourable trading pattern with Christmas Day and New Year's Day falling on Sundays."
But he added: "We expect that the tough trading environment will continue during 2013, with consumers remaining cautious and inflationary cost pressure on a number of key commodities. However, having built strong foundations in 2012 for our multichannel approach, we are well placed to drive further sales growth in the year ahead."But he added: "We expect that the tough trading environment will continue during 2013, with consumers remaining cautious and inflationary cost pressure on a number of key commodities. However, having built strong foundations in 2012 for our multichannel approach, we are well placed to drive further sales growth in the year ahead."
Analysts at N1 Singer immediately cut their estimate for 2012 pre-tax profits, which will be announced in March, by 2% and 2013's estimate by 4%. In a note to clients, the broker wrote: "By all accounts trading since the third-quarter update has continued to be challenging, resulting in an 2012 like-for-like outcome of -2.7%, with the implied second-half performance at -3.1% versus -2.6% in the first half. Total sales growth for the year is cited at being 4.8% and this compares against our estimate of 5.6%."Analysts at N1 Singer immediately cut their estimate for 2012 pre-tax profits, which will be announced in March, by 2% and 2013's estimate by 4%. In a note to clients, the broker wrote: "By all accounts trading since the third-quarter update has continued to be challenging, resulting in an 2012 like-for-like outcome of -2.7%, with the implied second-half performance at -3.1% versus -2.6% in the first half. Total sales growth for the year is cited at being 4.8% and this compares against our estimate of 5.6%."
The total sales growth – as opposed to the falls in like-for-like sales – comes from opening new stores. During the year Greggs added 100 new shops to give it a total of 1,671 outlets. The company said that 48% of the new openings were in locations away from high streets, while the company also completed 118 shop refurbishments. The total sales growth – as opposed to the falls in like-for-like sales – comes from opening new stores. During the year Greggs added 100 new shops to give it a total of 1,671 outlets. The company said 48% of the new openings were in locations away from high streets, while the company also completed 118 shop refurbishments.