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Greggs shares hit after sales and profits fall | |
(about 3 hours later) | |
High Street baker Greggs' shares have fallen more than 7% after it reported falling sales and profits. | |
Like-for-like sales, which exclude new outlets, fell 2.9% in the first half of 2013, partly due to cold weather at the start of the year. Recent trading has also been hit by July's heatwave. | |
Half-year profits fell by £4.6m to £11.4m, and it warned annual profits would now be £3m lower than expected. | Half-year profits fell by £4.6m to £11.4m, and it warned annual profits would now be £3m lower than expected. |
Greggs said it would now reshape the business and speed up its shop refits. | |
"We will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth," said Greggs chief executive Roger Whiteside. | "We will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth," said Greggs chief executive Roger Whiteside. |
Loyalty scheme | Loyalty scheme |
Greggs said it would focus on improving existing shops rather than opening new stores, with plans to refit up to 240 shops in the year. | Greggs said it would focus on improving existing shops rather than opening new stores, with plans to refit up to 240 shops in the year. |
It will also launch a customer loyalty scheme to try to win more customers. | It will also launch a customer loyalty scheme to try to win more customers. |
The changes will result in one-off charges of up to £8m in the second half of the year, Greggs said. | The changes will result in one-off charges of up to £8m in the second half of the year, Greggs said. |
It said a trial of entering the coffee market with a stand-alone chain Greggs Moment would not be continued. Instead it will incorporate its coffee business within the existing shops. | It said a trial of entering the coffee market with a stand-alone chain Greggs Moment would not be continued. Instead it will incorporate its coffee business within the existing shops. |
Greggs also warned that the current heatwave had hurt trading in the five weeks to early August, with the popularity of lower margin cold drinks also affecting profits. | Greggs also warned that the current heatwave had hurt trading in the five weeks to early August, with the popularity of lower margin cold drinks also affecting profits. |
Greggs is a huge presence on UK High Streets, with almost 1,700 outlets. | Greggs is a huge presence on UK High Streets, with almost 1,700 outlets. |
So far this year, it has seen the addition of 19 new shops, which has helped increase total sales by 3.4%. | So far this year, it has seen the addition of 19 new shops, which has helped increase total sales by 3.4%. |
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