Greggs has hailed its resilient Christmas trading despite a drop in like-for-like sales. The Newcastle baker said it intends to "substantially increase investment" in its core business by refitting up to 300 shops this year following a successful refit programme in 2012.
Like-for-like sales for the five weeks to 5 January 2013 were down 2.9 per cent on 2012 when Greggs said it had experienced "a particularly favourable trading pattern with Christmas Day and New Year's Day falling on Sundays". Total sales for the period grew by 4.3 per cent.
Greggs sold 8.5 million of its own-baked mince pies, a 7 per cent increase on last year, and said new channels to market, including wholesaling and franchising, has added 3 per cent to its total sales growth.
In particular the link-up with Iceland was performing well as was the franchising partnership with service station operator Moto. More service station Greggs will open in 2013, adding to the 11 shops already in operation.
In a trading update, Greggs said like-for-like sales for its full year to 29 December 2012 were down by 2.7 per cent although total sales grew by 4.8 per cent. The company expects to report full year results broadly in line with expectations.
During 2012 Greggs opened a record 121 new shops with a net increase of 100, after 21 closures. The company operated a total of 1,671 shops at 29 December 2012.
After being encouraged by the performance of its refit programme in 2012 including the new 'Greggs the Bakery' format, Greggs said it will "substantially increase investment" in its core business by refitting 200-300 shops. The baker also expects to open 80-90 new shops, with about 30 closures, giving a net 50-60 new shops for the year.
Looking ahead, outgoing chief executive Ken McKeikan said: "We expect that the tough trading environment will continue during 2013, with consumers remaining cautious and inflationary cost pressure on a number of key commodities.
"However, having built strong foundations in 2012 for our multi-channel approach, we are well placed to drive further sales growth in the year ahead."