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No plans to move base says Greggs
GREGGS the bakers has denied that plans to open a new pie and pasty factory in the South will undermine its position as an iconic North-East company.
Despite a recent dip in sales, which it blamed on heavy downpours deterring shoppers from the high street, the Newcastle-based company said it needed to double production space to satisfy demand for its savouries.
With the Greggs factory in Longbenton approaching full capacity, the firm has been scouting sites in the East Midlands and further south, where it plans to open a new £35m facility in 2014.
Ken McMeikan, the company’s chief executive, warned customers to brace themselves for price increases as weak global harvests had raised the cost of items such as wheat and pork. But he refused to accept that the emergence of a rival site signalled a shift away from its roots.
“The Newcastle site can only supply so much. The expansion is good news and our staff in the North-East are delighted that we are continuing to grow.
“We remain headquartered here and are as proud of our roots as we have always been.
“The expertise we have here will be used to develop the new site. All in all, this is a good news story for the North-East.
“It also makes sense for us to have one in the South from a logistical point of view because it will help us to cut delivery times to our shops.”
Sales at the firm’s stores open for more than a year fell 2.6 per cent in the 14 weeks to October 6, a worse-thanexpected performance, that followed a 3.5 per cent decline in its second quarter.
Greggs said it expected belt tightening among consumers would lead to a similar sales performance in its fourth quarter and that it would try to partially offset lower sales through increased profits from wholesaling and franchising.
It expects to open 100 new shops in the year, compared to a target of 90.
The group’s decision to sell frozen versions of its products via Iceland stores continues to pay off, with a strong performance across the 11 product lines. It has also been in talks with other retailers keen to stock Greggs products once its exclusive deal with Iceland expires next April.
Mr McMeikan, a veteran of the Falklands War, hoped a trial to sell Greggs products, such as steak bakes and chilli bakes, on a British Army base in Germany would lead to a worldwide deal to supply the Armed Forces.