Foul weather affects Greggs sales, first-half profit up 15% pre-tax |
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Sun, 07 Aug 2005 06:04
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LONDON - The UK's biggest High Street bakery firm, Greggs has reported a 15 percent increase in first-half profits for the current year. However, the firm has bluntly stated that the scorching summer heat affected it's sales as people preferred buying clothes to eating sausage rolls and Chelsea buns.
But sausage rolls, baked beans and cheese pasty sold very nicely as like-for-like sales grew by 5.2 percent in the first six months of the year. Greggs interim pre-tax profits stood at £15.6 million. However, it was a bad six weeks up to August as the growth across the 1,290 Greggs and Bakers Oven shops slowed down to just 3.0 percent, causing Greggs to warn about its prospects in the second half of the year.
Greggs Managing Director Sir Michael Darrington was optimistic about the growth in the next six months, but said that much would depend on how the weather played up during the same time. "We had anticipated that sales growth would slow as we entered a period of more testing comparatives, and this effect was exaggerated by the onset of very changeable weather," the company said in a statement.
It was not only the weather that was causing furrowed eyebrows at Greggs, but also the fact that there was continuing fuel cost pressures. Besides, the raging impact of obesity has caused the British government to warn about eating fatty foods namely sausages. "Our sausage rolls are delicious. I enjoy many of them myself. Like all things, though, nobody should live off them." Darrington pointed out.
To counter the effect of people shunning the sausages and other fatty foods, Greggs has come out with a new "low-fat" sausage roll as well as Just Ham and Just Chicken sandwiches which contain only three grams of fat as compared to the standard 20 grams in other sandwiches. "People will eat what they want and over the next 10 years, diets will change and we will evolve with them. Our low-fat sausage roll trial is progressing well," Darrington observed. Greggs has put its interim dividend at 36 pence per share as compared to the 30 pence last year.
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