The high street has struggled greatly in the past few years, with poor weather driving customers indoors and into the arms of e-tailers only exacerbating the issue of the economic crisis. As a result, chains which previously enjoyed huge success in town centres saw falling sales and profits, with the result that many high profile brands had no choice but to enter administration.
Although many continue to struggle to this day, others have managed to take steps towards recovery, with a prime example being bakery chain Greggs. Despite the fact that like for like sales fell by 0.5 per cent in the 13 weeks to September 28th, this was a vast improvement on the average 2.1 per cent across the year so far and indicated a strengthening of sales as winter approaches.
Greggs has blamed the previously poor performance on bad weather on the high street, which lessened consumers’ appetite for take-out hot baked goods. Yet it appears the summer’s beautiful weather also had a negative impact, with sales of hot foods dropping and cold snacks and sandwiches increasing rapidly.
Chief executive Roger Whiteside remains cautiously optimistic about the future of the brand, but is careful to point out that personal finances remain a problem.
He says; “We are encouraged by the recent improvement in like for like performance, although with consumer disposable incomes still under pressure we remain cautious.
“Cost inflation is in line with our expectations and the group’s cash position remains strong.
“Our overall outlook for the full year is unchanged.”
Greggs originally planned to implement a store expansion scheme this year, but following two profit warnings earlier in the year has now dropped these plans. In fact, during the latest quarter it closed 17 stores in total, choosing instead to open 20 in more profitable locations such as train stations and motorway service stops.
Furthermore, plans for a second savoury factory in the East Midlands have similarly been consigned to the scrapheap in an attempt to lower operating costs.
The bakery chain is now focusing on expanding its consumer base by embarking upon a turnaround plan which will see new products such as pizza offered in its high street branches. Part of this investment will focus solely on refitting 215 of the chain’s most profitable stores, which equates to around 12 per cent of the brand’s 1,700-strong property portfolio.
With consumers once more choosing the high street over online shopping, it is hoped that Greggs will be able to post even more encouraging results for the current quarter and even be able to return to growth.
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