Greggs slows sales decline as it battles to win back customers

Bakery chain, which issued two profit warnings this year, has abandoned plans to increase number of stores

The bakery chain Greggs has reported a modest decline in sales, as the company battles to win back customers to its hot pies and sausage rolls.

Like-for-like sales fell 0.5% in the 13 weeks to 28 September, after a hot summer curbed Britain's appetite for baked goods. But this represented a better result than the 2.1% decline in like-for-like sales for the year so far.

Greggs' chief executive, Roger Whiteside, said he was encouraged by the improvement in performance. Whiteside, who was drafted in from Punch Taverns in February, has embarked on a turnaround plan to brighten up the bakeries and broaden the range with a move into new products, such as pizza.

"We are encouraged by the recent improvement in like-for-like performance, although with consumer disposable incomes still under pressure we remain cautious," he said. "Cost inflation is in line with our expectations and the group's cash position remains strong. Our overall outlook for the full year is unchanged."

Greggs has abandoned plans to increase its total number of stores: in the latest quarter it closed almost as many stores as it opened, with 20 new shops appearing and 17 being shut down. The company said it expected to refit 215 shops by the end of the year, around 12% of its entire estate of 1,700 bakeries.

The company has issued two profit warnings this year, the most recent in August, and at various times has attributed its problems to cold weather, hot weather, tough conditions on the high street and "promiscuous shoppers". The company recently abandoned plans to build a second savoury factory in the east Midlands, as well as its Greggs Moment coffee shops which it had been trialling since 2011.

Article Source : http://www.guardian.co.uk

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