Growth plans for Greggs, the UK’s biggest bakery retailer, are still on track, despite taking a hit on profits due to cost increases and a withdrawal from Belgium, CEO Ken McMeikan revealed to British Baker.
The firm has budgeted for marginal like-for-like sales growth in 2009, after announcing a 7.2% fall in operating profit in its full-year results. Despite a rise in year-on-year sales of 7.1% to £628m, including a like-for-like increase of 4.4%, "substantial increases" in energy and ingre-dients costs in the 52 weeks to 27 December 2008, as well as the cost of pulling its 10 shops in Belgium, contributed to the loss.
"The results are incredibly resilient in the current climate and in line with our expectations," McMeikan said. "The fact we took decisions last year not to pass extra costs on to our customers was reflected in the continued like-for-like growth last year and into the start of this year."
Chairman Derek Netherton said it had been "a challenging year for Greggs", but that it was still planning accelerated growth in 2010, as well as streamlining the business. Currently only 30% of Greggs’ products are standard across all its stores but McMeikan aims to increase this to 80% by the end of the year, with the remaining 20% to consist of regional favourites. "We have a dedicated team looking at the products in each of our 10 divisions," said McMeikan. "We are currently trialling ideas for the 80% national range in 25 of our shops across the UK. By the end of 2009 we will have considered what the range should be, trialled it and then rolled it out."
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