Greggs’ profits fall in challenging market

Greggs has seen an 18.9% fall in pre-tax profit following competitive trading conditions, according to latest figures.

Published in the company’s preliminary results for the 52 weeks ended 28 December 2013, the business saw profit decrease to £41m, despite total sales rising 3.8% to £762m.

Full year like-for-like (LFL) sales dipped 0.8%, but rose 1.2% in own shops open for a year for the second half of the year, rising to 2.6% in Q4.

Roger Whiteside, chief executive, said he expected market conditions to remain challenging in 2014. “2013 was a year of transition for Greggs as our new strategic focus centred on the growing food-on-the-go market,” he explained. “Total LFL sales were down 0.8%, reflecting the tough and competitive trading conditions. However, I am encouraged by the improvement in performance in recent months as our new strategic focus started to deliver benefits.”

He added that it will “be a year of further change” for the business, as it moves forward with its plan to “focus on the food-on-the-go market”.

The results follow January’s announcement that Greggs plans to cut more than 400 jobs due to structural changes to its supply chain and a reduction in general overhead costs.

Ian Durant, chairman, said organisational change and potential redundancies were “necessary for the long-term health of the business”.

The year saw a record refit of 216 shops, but overall shop numbers remained unchanged, with 68 openings and closures. As of 28 December 2013, 1,671 shops were trading, including 25 franchised units.

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