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Greggs to Slow New Store Openings to Restore Profitable Growth

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Greggs to Slow New Store Openings to Restore Profitable Growth

Greggs to Slow New Store Openings to Restore Profitable Growth
August 06
13:12 2013

Although group sales increased by 3.4% to £362 million for the first half ended 29 June 2013, like-for-like own shop sales at Greggs, the UK’s largest retail baker, dropped by 2.9% resulting in pre-tax profit falling by £4.6 million to £11.4 million.

Consequently, Greggs has decided that for the remainder of the year it will focus less on growing net shop numbers as it puts increased emphasis on improving the quality of its retail estate. This year Greggs now expects to open around 70 new shops, compared to 121 in 2012, and to close 40 to 50 shops. This will result 20 to 30 net openings across the year as a whole as against 100 net in 2012.

Greggs’ priority is to return its core business to like-for-like growth by focusing on products and services for the ‘food on the go’ customer. The ‘food on the go’ market is worth £6 billion and growing. Greggs will do this by improving the quality of its existing estate, increasing the rate of shop relocations, accelerating its refit programme with one ‘Bakery food on the go’ shop format, and limiting net shop additions for 2-3 years.

“Greggs is a strong brand that has the ability to grow shareholder value over the long term. Our focus for the future will be on winning in the growing food on the go market. As a consequence we will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth for the benefit of shareholders, employees and the wider community,” says Roger Whiteside, chief executive of Greggs.

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