High street bakery chain Greggs saw pre-tax profits fall by 2.2% in 2012 to £51.9m - despite seeing an increase in sales as it moved into new channels such as wholesale and franchising.
The company, which recently saw former Punch Taverns boss Roger Whiteside take the helm, said total sales had increased by 4.8% to £735m. However, its like-for-like sales (LFLs) dropped by 2.7%.
It blamed the fall in profit and LFLs on “challenging market conditions”.
Whiteside said: “Success in our new business channels coupled with new shop openings saw total sales growing again this year, although challenging market conditions resulted in disappointing like-for-like sales in our existing estate.
“We saw no let-up in the pressure on our customers’ disposable incomes during 2012. Consumers are shopping less and looking to make their money go further, putting pressure on marginal shopping locations and weaker brands. This was reflected in the failure of a number of well-known retail chains in the course of the year.”
The BB75-topping retailer opened 100 new stores during 2012, and added that wholesale and franchise sales had contributed 2.8% to sales growth.
Whiteside added: “We have reshaped our plans for 2013 to focus on our core estate by increasing investment in our successful new formats in ‘food on the go’ and ‘local bakery’. At the same time, we will continue to develop sales through new shop openings, and make further progress in new markets through our wholesale and franchise agreements.”
For further analysis of Greggs’ results see this week’s British Baker