Greggs warns of hit to sales as Beast from the East blows spending off course
PUBLISHED: 08:58 09 May 2018 | UPDATED: 08:58 09 May 2018
Bakery chain Greggs has warned full-year profits could flat-line after taking a sales hit from the Beast from the East and slower spring trading.
The retailer - which has nearly 1,900 shops across the UK - saw like-for-like sales growth in company-managed outlets slow sharply to 1.3% in the first 18 weeks of the year, down from 3.5% a year earlier.
Greggs said the severe weather in March compounded general weaker trading conditions seen in early spring, with demand for its food-to-go range impacted in particular as it was forced to shut shops in a raft of locations.
It added the number of sales rung up at its tills was lower in the 18-week period.
While sales have since rebounded in May so far, Greggs said it remains “cautious” over the trading outlook and warned full-year underlying profits were expected to be broadly flat.
The group said: “The combination of these factors, along with our strong comparative performance in the same period of 2017, has made for a challenging trading environment throughout March and April.
“Sales in May have started more strongly than we experienced throughout March and April, however given the uncertainties over market footfall we are cautious in respect of the outlook for sales in the balance of the year.
“Taking into account trading conditions in the year to date, and our more cautious outlook, we currently believe that underlying profits for the year are likely to be at a similar level to last year.”
The group had started 2018 with strong trading, having reported sales up 3.2% in the first two months, but quickly saw conditions worsen as so-called shopper footfall slowed amid the Beast from the East snow disruption and general cautious consumer conditions.