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Greggs warns of sales slump
RISING food prices and shoppers tightening their purse strings blighted a trading update from bakery chain Greggs.
Its shares were more than 4 per cent lower as the Newcastle-based business said it no longer expected underlying sales growth in its Christmas quarter.
Like-for-like sales fell 2.6 per cent in the 14 weeks to October 6, which Greggs said represented a weaker-than-expected recovery from the decline of 3.5 per cent seen in the previous three month period.
The pies and pasties seller is also braced for the cost of ingredients to increase at the start of next year, as this summer's poor weather triggers rises in a number of key commodities.
Yesterday, the National Farmers Union said wheat yields in England and Wales fell 14.1 per cent this year on a five-year average to levels last seen in the late 1980s.
Greggs said it will mitigate the impact of the weaker sales performance through tight control of costs and its ongoing plans to develop the Greggs brand, such as bake-at-home products in more than 750 Iceland stores.
The company said: "We expect consumers to continue showing restraint and now anticipate like-for-like sales to remain negative in the final quarter."
Total sales grew by 5.9 per cent in the third quarter after Greggs opened 37 new stores, taking its total portfolio to 1,641 sites.