Greggs, the high street bakery retailer that tops BB75, today warned 2012 would be a “challenging year” after reporting a slowdown in sales at the start of the year and being impacted by bad weather.

Unveiling its preliminary results for the 52 weeks to 31 December 2011, the company said the slow start  to the new year had been expected and that total sales to March 2010 were up by 3.3%. However, like-for-like sales in the same period were down by 1.8%.

Ken McMeikan, chief executive, said: “It is too early to tell if this slower start is a sign of a more prolonged trend in sales, but we have managed costs well through this period and our profit performance remains on target.”

Despite the subdued start to its new financial year, Greggs unveiled a 5.8% increase in sales to £701m in 2011, driven by new store openings, and reported that like-for-like sales for the same period had remained positive at +1.4%.

Pre-tax profit was also up slightly at 1.1% to £53.1m.

The board recommended an increased final dividend of 13.5 pence per share, making a total dividend for the year of 19.3 pence (2010: 18.2 pence), the 27th year that the company has increased its dividend..

Commenting on the company’s performance, Derek Netherton, chairman, added: “Greggs performed well in 2011 in what was a very challenging time for the economy and the consumer. We have continued to make good progress towards our strategic objectives with a record number of shop openings across the UK, and investment in two major new bakeries in Newcastle and Cumbria.  

“While we expect 2012 to be another year of significant challenge for UK consumers, we believe we are well placed to deliver further progress. In the current year we will continue our accelerated expansion with the opening of around 90 net new shops and further development of new channels to market. This, and our determination to deliver further cost savings, reinforces our belief that the business continues to offer substantial opportunities for long-term, profitable growth.”