Greggs sales growth slows on weather, less footfall

By Paul Sandle

LONDON (Reuters) - British baker Greggs Plc (GRG.L: Quote, Profile, Research) said like-for-like sales growth slowed in March and April, mainly as a result of poorer weather and the timing of Easter, but also reflecting reduced numbers of shoppers in general.

Greggs, which sells food ranging from caramel slices to sausage rolls, said like-for-like sales rose 4.7 percent in the 19 weeks to May 10, against 6.2 percent in the first 10 weeks.

Chief executive Michael Darrington said poor weather had kept customers at home in April.

"If there's nobody on the High Street, it's hard for us to do much business," he said, adding sales had picked up in May as the weather improved. "Now the weather's moving, people are out and they are shopping."

Separately on Tuesday, the British Retail Consortium said retail sales values fell for a second consecutive month in April, suggesting tighter credit conditions and rising household bills are forcing consumers to tighten their belts.

Darrington, who retires at the end of July to be succeeded by Ken McMeikan from J. Sainsbury (SBRY.L: Quote, Profile, Research), said rises in input costs, such as eggs, cream and milk, were starting to subside. "It's still a mixed bag, but there are better trends," he said.

Darrington said the company had added a net eight stores since the beginning of the year, taking its portfolio to 1,376, and will "comfortably exceed" its target of 40 net new stores for the year.

Citi analysts said: "While Greggs seems to be successfully negotiating the rising commodity price environment, we believe the statement shows its volumes are not immune to consumer pressures and high street footfall.