Greggs’ like-for-like sales fell again, down 2.6% in the third quarter, while new channels helped boost total sales by 5.9%.
The leading BB75 retailer said it was reducing its reliance on traditional high street locations and looking to grow its wholesaling and franchising business.
It saw its ‘bake at home’ products performing strongly in Iceland over the quarter, while new motorway service shops opened in partnership with Moto.
Greggs also announced it was looking to open a second savouries production site, in the south of England, which would amount to a £30-35 million investment over two years.
Sales in new channels accounted for 3.5% of the chain’s total sales growth, for the 14 weeks to 6 October.
Greggs announced it had also opened 70 net new shops this year, to date, which was ahead of expectations. This contributed 5% to the total sales growth.
The chain said it was continuing to segment its shops into its three formats – food-to-go, local bakery and coffee shops – and planned to convert a further 10 shops to the ‘Greggs the Bakery’ format in the final quarter of 2012.
Ken McMeikan, chief executive, said the increase in total sales was driven by the retailer’s strong new shop opening programme “and continued success in wholesaling and franchising”.
“Like-for-like sales were down 2.6% in the 14-week period, an improvement on the 3.5% decline in the second quarter, but a smaller recovery than we had anticipated.”
He said he expected like-for-like sales to remain negative in the final quarter, as consumers were showing “restraint” with their spending.
Total sales for the 40 weeks to 6 October 2012, were up by 5%. Within this, new shops contributed 4.7%, wholesaling and franchising grew by 2.7% and like-for-like sales were down by 2.4%, said Greggs.