Record Sales For Greggs But Profits Fall

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Record Sales For Greggs But Profits Fall

Record Sales For Greggs But Profits Fall
March 21
12:34 2013

Despite the continued pressure on consumer spending and some of the wettest weather ever recorded during 2012, Greggs increased sales by 4.8% to a record £735 million as the UK’s leading retail baker benefited from opening new shops and expanding its wholesale and franchise business. However, like-for-like sales were 2.7% lower and pre-tax profit before exceptional items fell by 2.2% to £51.9 million.

Operating over 1,670 retail outlets throughout the country, Greggs serves freshly baked products to six million customers each week. Greggs opened 100 net new shops during 2012 and its expanding wholesale and franchise businesses contributed 2.8% points to sales growth.

Roger Whiteside, chief executive of Greggs.

“Success in our new business channels coupled with new shop openings saw total sales growing again this year despite challenging market conditions,” says Roger Whiteside, chief executive of Greggs. “We have reshaped our plans for 2013 to focus on our core estate by increasing investment in our successful new formats in ‘food on the go’ and ‘local bakery’. At the same time we will continue to develop sales through new shop openings, and make further progress in new markets through our wholesale and franchise agreements.”

He expects the trading environment to remain very challenging in 2013, with consumers remaining cautious and inflationary cost pressures affecting a number of the retail baker’s key commodities. During 2013, Greggs plans to more than double the pace of refurbishments across its outlets in addition to opening new shops in targeted locations. It is also planning to construct a new frozen manufacturing facility in Leicestershire.

Greggs has achieved substantial cost savings across its supply chain by investing in more efficient processes that have also enhanced food quality and safety. Its originally targeted savings of £10 million over five years were delivered two years ahead of schedule in 2012 and Greggs has now increased the target to £15 million by 2014.

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