Greggs sees full year slightly below market view

UK baker Greggs said based on current like-for-like (LFL) trading at its own shops it believes that profits for the year are likely to be slightly below the lower end of the range of market expectations.

Total sales for the 17 weeks to April 27th 2013 grew by 3.0%, driven by its new shop opening programme and wholesale and franchise sales.

Like-for-like (LFL) sales in its own shops during the period fell 4.4% after adverse weather in January and March kept customers away.

The most recent two weeks indicate an underlying rate of like-for-like decline of around 1.5%, Greggs explained, reflecting in part the start of the weaker comparisons seen last year.

Greggs said: "We are continuing to experience lower footfall across much of the estate although average transaction values have increased marginally. Our new shop openings remain focused on locations that have been less impacted by lower footfall such as workplaces, travel and leisure destinations."

Wholesale and franchise sales contributed 2.9% to overall sales growth.

Greggs said ten new shops were opened during the period and 59 refits completed.

Commenting on trading, the group said: "With the consumer remaining under pressure sales of promotional deals have been particularly strong with a slight impact on margin and we expect this trend to continue. Despite good cost control overall profits have been affected in the first quarter of the year and are behind our plan and last year."

Looking ahead to future trading, Greggs said it does not expect a significant improvement in the difficult underlying market conditions in the short term.

"We are evolving to position the business for long term growth and to develop the Greggs brand," it said.

CJ