Bakery chain feels pinch after record year

1:21pm Wednesday 14th May 2008

BAKERY chain Greggs yesterday revealed it is suffering at the hands of the current economic uncertainty.

The Newcastle-based group saw its rate of growth slow during March and last month, with sales rising by 4.7 per cent in the 19 weeks to May 10, in comparison with the 6.2 per cent growth seen in the first ten weeks of the year.

And Greggs - which saw record profits of £47.7m and all-time high sales of £586m during a "particularly strong" 2007 - said its ability to meet expectations for this year would depend partly on changes in the economic climate.

Speaking at the group's annual meeting in Newcastle yesterday, chairman Derek Netherton said that progress had slowed during the past two months, but stressed the company remained confident for its prospects in the long-term.

"This was partly a result of the poorer weather and a less favourable pattern of Easter holiday trading this year, together with a change in the phasing of our own marketing investment,"

he said.

"However, there is also widespread evidence of reduced footfall on the high street as consumers react to the tightening economic climate.

"We have always expected the group's performance in the first half of the current year to be constrained by comparison to the particularly strong period last year.

"Our ability to achieve the expected steady progress over the year as a whole will depend on the trend in like-for-like sales that emerges in the coming months."

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