Performance from sausage roll snack king Greggs in the first half of the year was decidedly soggy, with the group apportioning some of the blame on record levels of rainfall in the second quarter of the year.
The chain, which benefited from huge globs of free publicity at the time of the so-called "pastygate" tax controversy, saw profits and like-for-like sales fall in the six months to the end of June but its tie up with retailer Iceland Foods is reaping rewards.
Greggs, which operates 1,604 sites across the UK, says the bad weather hit the number of people dropping in for a pasty or coffee. The so called "footfall" number for the UK high street was down 7% in the second quarter and Greggs admits it "was not immune from this".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Sales at shops open for longer than a year - the like-for-like measure - were down 3.5% in the second quarter and 2.3% over the year as a whole.
Total sales, which includes the contribution from new shops, increased 4.5% on the same period of 2011 to £350m. Pre-tax profits dropped £0.8m on the prior year to £16.5m.
The news wasn't all bad though. The group is highly confident in its business model and continues a strong store opening programme, with net 33 new sites opened during the period and nearly 60 more planned for the remainder of the year.
Greggs has also sought to leverage its brand awareness by making nine frozen products available though frozen food specialist retailer Iceland, in its "bake at home" section. Here "sales have performed very strongly and are already making a contribution to profits."
The interim dividend has been announced at 6p per share, up 3.4% on last year.
Kennedy McMeikan, Greggs' Chief Executive said: "Our total sales growth of 4.5 per cent reflects the good performance from our new shop opening programme and strong growth in wholesale volumes."
However, McMeikan warned that conditions for consumers are likely to remain challenging in the second half of the year,
BS
