Greggs LFL sales to remain negative in final quarter

published 11 October 2012

High street baker Greggs said like-for-like (LFL) sales fell 2.6 per cent for the 14 weeks to October 6th as consumers continued to tighten their purse strings.

The decline in LFL sales was an improvement on the 3.5% deterioration in the second quarter but the company said it was a smaller recovery than it had anticipated and it expects sales to remain negative in the final quarter.

"Consumers showed restraint in their spending and the adverse weather in July, followed by flooding in parts of the country at the end of September, also impacted sales in the period," Greggs said in a company update.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The bakery and sandwich chain said total sales rose 5.9% for the 14 weeks with new channels contributing 3.5% to total sales growth.

The group's 'bake at home' sales through Iceland performed strongly as did the new motorway services shops opened in partnership with Moto. Sales were also boosted by 70 new shops opened year to date.

Commenting on trading, chief executive Kennedy McMeikan said: "Whilst we remain cautious about the economic outlook total sales will continue to benefit from the success of our new shop openings and expansion in wholesaling and franchising."

"However, we expect consumers to continue showing restraint and now anticipate like-for-like sales to remain negative in the final quarter. We will partially mitigate the impact of this lower like-for-like sales performance through tight control of costs and the increased profit contribution from wholesaling and franchising."