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Greggs like-for-like sales drop 3.2%

Press Release   •   Aug 07, 2013 10:27 BST

Bakery chain Greggs said on Tuesday that the recent heatwave will see it lose £3 million in profits.

The company, which sells sandwiches, savouries and cakes from 1,690 stores, said on Tuesday that like-for-like sales dropped 3.2 percent in the first five weeks of the second half, reversing an improving trend seen in the second quarter.

Greggs also warned that the current heatwave had hurt trading in the five weeks to early August, with the popularity of lower margin cold drinks also affecting profits.

As a result of the weather and one-off costs, Greggs said it now expected full-year profits to be 3 million pounds lower than expected.

Greggs has also said it has decided not to roll out a network of standalone coffee shops, despite seeing encouraging results from a trial of its "Greggs Moment" brand.

In a bid to grab a larger slice of the £6 billion "food on the go" market, the chain has extended its opening hours, bringing in teams to make fresh sandwiches earlier and staying open later to cater to the growing trend for afternoon snacking.

"Whilst over many years Greggs has developed a leading position in the bakery market, there is no question that customer preferences are shifting," said Greggs chief executive Roger Whiteside.

"We will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth," he added.

Greggs opened 100 stores last year, but Mr Whiteside said it would add 20-30 stores this year, after about 40 closures.

The company will revamp some stores, introducing more seats for the lunchtime crowd, and move some stores to better locations. Greggs overhauled 90 stores in the first half and will complete between 230 and 250 refits in the full year.

Mr Whiteside is also shaking up the product range, improving items such as cakes and pizza.

The group warned in April that it would miss profit forecasts as shoppers deserted Britain's high streets at the start of the year due to a combination of cold weather and strained finances.

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