Greggs delays new store openings as sales growth slows

Greggs has been forced to delay new store openings as faltering sales stoke fears of a slowdown at the British baker.

On Wednesday, the high street chain, led by chief executive Roisin Currie, said it planned to add 120 new stores this year, which is 20 fewer than expected. It has 2,675 stores in total, and had been adding around 145 stores every year on average.

The sausage roll maker highlighted challenging market conditions – including the rising cost of living and the Government’s National Insurance contribution (NIC) changes – for raising expenses and forcing it to rein back its ambitions. Greggs is facing a £20m hit from the NICs increase.

To offset the increase, the group said it will increase the price of some of its flagship offers – with a breakfast meal deal rising to £4.15 from £3.95 from Friday.

While the bakery said cost inflation had marginally improved, Ms Currie said that tax increases from the Labour government had made the chain harder to run.

“It’s hard to plan and manage a business when you have a £20m hit that you haven’t expected,” she said.

She added that Greggs’ consumers were still feeling the pinch from stubbornly high prices and the wider cost of living.

‘Peak Greggs’

The baker had been one of Britain’s most successful high street chains in recent years, but a recent sales slowdown has prompted fears that the market had now reached “peak Greggs”, with the company struggling to maintain momentum.

Shares have plunged almost 40pc so far this year and the food giant is one of the most shorted stocks in the UK, with fund managers including Blackrock and Millennium betting against its share.

In July, Greggs reported a sharp drop in sales due to very high temperatures, with shares falling more than 14pc following the news.

Earlier this year the bakery giant said it will try to expand its product offering to cater to people on weight loss jabs, after weaker demand for its sausage rolls and other baked goods dealt a £10m blow to profits.

Ms Currie said there was “no doubt” that the injections were changing “what and how” people eat, and they would be rolling out smaller portions and protein-rich alternatives.

In order to enhance Greggs’ appeal across the day, the company is also increasing its sandwich and toastie options – including a pulled pork sandwich.

Sales for the third quarter rose by 6.1pc to the end of September. Shares rose 6.8pc to £17.10.

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