GREGGS has issued its first profits warning for five years as the North-East baker admitted the recession has finally started to bite. 

After remaining relatively impervious to the high street downturn the Newcastle-based pie and pasty maker admitted it now expected full-year profit to be down this year, partly blaming the Arctic weather in January and March for keeping shoppers out of its 1,681 stores.

Shares in the company, which has more outlets in Britain than burger chain McDonald's, fell as much as 9 per cent after it announced pretax profit for 2013 was likely to be slightly below the lower end of market expectations of £47.5m.

"Essentially we've seen lower customer footfall across much of the estate," recently appointed chief executive Roger Whiteside said, adding: "We see no real sign of significant improvement in this underlying trend in the short term."

Mr Whiteside defended Greggs against reports made earlier this month that the company had been scrimping on the size of its savouries while pushing up prices. He said accusations that items such as a bacon bap had shrunk by 18 per cent, since last May were inaccurate, and had been based on comparisons with items on sale in 2011. However, he admitted there had been some slight reductions in the weight of some products as the firm had cut back on ingredients such as fat and salt. He denied customers were turning their back on Britain's biggest seller of food-on-the-go over rising concerns about value for money. 

Mr Whiteside said customers may be suffering from a compound effect of the economy bumping along the bottom for some time. He added:

"Successive years of being under pressure have meant ultimately something has to give and they are having to adjust their budgets accordingly."

There had been a more noticeable pattern of consumers spending after pay day before cutting back when they ran out of money towards the end of the month. Promotions such as breakfast and lunch deals performed well but had a slight impact on margins, with "promiscuous" consumers hunting for the best value, Mr Whiteside said.

Greggs has attempted to offset pressure on its high street locations by focusing new openings on workplaces, travel and leisure destinations. It has opened 18 new shops so far this year, including six franchised units with motorway services operator Moto but closed eight shops in areas where sales were weak.

Last month, Mr Whiteside said the firm was sprucing up its stores to persuade cash-strapped shoppers to visit.

So far this year, it has refitted 59, as part of plans to do about 250 in the year ahead. "There are fewer customers about shopping. What we've got to do is attract more of those customers to Greggs," Mr Whiteside said.

In the meantime, Sky 1 will broadcast the first in a new fly-on-the-wall documentary series on Monday, called Greggs: More Than Meats The Pie.
Siobhan Mulholland, Sky's commissioning editor for factual programming said it was "a warm-hearted and fascinating insight into a much loved British institution. The access is impressive; the cameras will be in the shops, following the delivery trucks, following characters and even in the usually confidential tasting labs."