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Greggs blames bad weather for falling sales Greggs blames bad weather for falling sales
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Greggs, the bakery chain, has become the latest retailer to blame poor weather for falling sales and profits. Greggs, the bakery chain, has become the latest retailer to blame poor weather for falling sales and profits. The sandwich and sausage roll seller's profits fell 2.2% to £52m in the year to 29 December while underlying sales slid 2.7%.
The high-street sandwich and sausage roll seller revealed profits fell 2.2% to £52m in the year to 29 December while underlying sales slid 2.7%.
"The weather was particularly poor during the year, which was the second wettest in the UK since records began. This was a significant deterrent to the frequent shopping trips that are a particular feature of a daily purchase business like Greggs," the chief executive, Roger Whiteside, said."The weather was particularly poor during the year, which was the second wettest in the UK since records began. This was a significant deterrent to the frequent shopping trips that are a particular feature of a daily purchase business like Greggs," the chief executive, Roger Whiteside, said.
One shaft of sunlight was that total sales rose 4.8% to £735m as the company increased its wholesale supplies to the frozen food chain Iceland and franchise operations with the motorway services operator Moto. One hopeful sign was that total sales rose 4.8% to £735m as Greggs increased its wholesale supplies to the frozen food chain Iceland and franchise operations with the motorway services operator Moto. Greggs hopes those new deals will help boost sales further this year and is considering tie-ups with other retailers. The chain is doubling the pace of store refurbishments and will open a net 50 new stores this year, although that is only half as many as in 2012
Greggs hopes those new deals will help boost sales further this year and is considering tie-ups with other retailers. The chain is also doubling the pace of store refurbishments and will open a net 50 new stores this year, although that is only half as many as last year. Sales in stores open for more than a year were on a downward trend. Greggs said underlying sales were down 4% in the first 11 weeks of 2013, partly because of the snow in January.
Meanwhile sales in stores open for more than a year were on a downward trend. Greggs admitted that underlying sales were down 4% in the first 11 weeks of 2013, partly because of the snow in January. The firm is the latest in a string of high street businesses to blame bad weather for their woes including Debenhams, Punch Taverns, the pub company, and Home Retail Group's Homebase.
Greggs is the latest in a string of high-street businesses to blame bad weather for their woes including Debenhams, the department store, Punch Taverns, the pub company, and Home Retail Group's Homebase. Greggs insisted it was the weather rather than any concerns about the horsemeat scandal that had deterred shoppers. Whiteside said: "We're vertically integrated, so we're on top of it. Customers haven't really raised it with us at all, so it's really had no impact with us." He said the company had achieved cost savings of £10m in its supply chain by investing in more efficient processes and insisted it had also enhanced food quality and safety.
Greggs insisted it was the weather rather than any concerns about the horsemeat scandal that had deterred shoppers. Whiteside said: "We're vertically integrated, so we're on top of it. Customers haven't really raised it with us at all, so it's really had no impact with us."
He said the company had achieved cost savings of £10m in its supply chain by investing in more efficient processes and insisted it had also enhanced food quality and safety.
Derek Netherton, the chairman, said: "There can be no doubt that the trading environment will remain very challenging in 2013, with consumers remaining cautious and inflationary cost pressures affecting a number of our key commodities."Derek Netherton, the chairman, said: "There can be no doubt that the trading environment will remain very challenging in 2013, with consumers remaining cautious and inflationary cost pressures affecting a number of our key commodities."