LONDON (Reuters) - Greggs (GRG.L), Britain’s largest food-on-the-go retailer, posted an expected 2 percent fall in 2012 profit and said growth would be held back this year as it invests for the future.
Newcastle, north east England-based Greggs said on Wednesday it made an underlying pretax profit of 51.9 million pounds in the year to December 29, in line with analysts’ consensus forecasts but down from 53.1 million pounds in 2011.
The group which sells bread, sandwiches, savouries, cakes and pastries to over 6 million customers a week, said total sales rose 4.8 percent to 735 million pounds, reflecting 100 new shop openings and growth in wholesale and franchise business.
However, sales at stores open over a year fell 2.7 percent, hit by poor weather and declining high street footfall as shoppers migrated online.
Many retailers are suffering as Britain teeters on the brink of a third recession in four years and consumers fret over job security, wages growth not keeping up with inflation and government cuts.
Even with its relatively low transaction value of just over two pounds Greggs has not been immune to the downturn.
The firm said although total sales for the first 11 weeks of its new financial year were up 4.2 percent, like-for-like sales were down 4.0 percent, with snow in January also impacting.
Greggs’ new chief executive, Roger Whiteside, has reshaped the firm’s plans for 2013 to focus on its core estate. He plans to increase investment in new food-on-the-go and bakery formats.
“This will impact like-for-like performance in the short term due to increased shop closure periods but will provide a stronger platform for growth in the future,” he said.
He also plans to find more efficiencies to help mitigate the impact of commodity inflation on customer prices.
Greggs is paying a dividend of 19.5 pence, up 1 percent - a 28th consecutive year of dividend growth.
Shares in the firm, down 4 percent over the last year, closed Tuesday at 524 pence, valuing the business at 530 million pounds.
Reporting by James Davey; editing by Neil Maidment