Greggs on a roll despite hit from summer heatwave

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Greggs has shrugged off a wobble in demand during the summer heatwave to report a surge in sales.

The bakery chain updated on its progress as retail industry figures suggested sales fell on the high street last month to put the brakes on spending after four months of consecutive growth – aided by the hot weather.

Greggs, famed for its sausage rolls but now firmly concentrated on healthier meals and drinks, saw its shares rise 7% after the progress update to the City.

The figures showed like-for-like sales at its company-managed stores up by 3.2% in the 13 weeks to 29 September.

Total sales were 7.3% higher – reflecting the impact of more than 90 net new stores.

The company said business picked up in September when the worst of the heat was over and people returned to work after summer breaks.

An employee of Greggs bakery holds a pasty  Greggs on a roll despite hit from summer heatwave 143416562 1 2048x1536 3398555
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Greggs still makes pasties and sausage rolls but says customers are also in tune with new ranges including chilli beef bakes and Pumpkin Spice Latte coffees

The report stated: “Our drinks range and new focaccia-style pizzas proved popular over the summer months.

“We continued to see growth at breakfast time, helped by the expansion of our great value deals and our wide selection of freshly-ground Fairtrade coffees.

“As testament to the increased breadth of our product range, we were recognised at PETA’s 2018 Vegan Food Awards and were awarded the `Best Vegan Sandwich’ for our Mexican Bean Wrap.”

It has credited a focus on healthier products for continuing to drive its growth in a year that has seen chains hit by a combination of rising costs from business rates and falling sales amid weaker consumer demand.

While cold weather dented business at the start of the year, a pick-up in temperatures delivered some relief for fashion retailers especially while supermarkets continued to thrive.

House of Fraser   Greggs on a roll despite hit from summer heatwave skynews house of fraser shop front 4403425
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Maplin, Toys R US and House of Fraser are among major chains to have collapsed this year

However, figures from the British Retail Consortium showed a 0.2% decline in retail sales last month compared to a year earlier.

They pointed to an impact from Brexit uncertainty as grocery revenues fell back slightly.

The body said ‘back-to-school’ sales also failed to meet expectations as the industry heads towards its most important season – the run-up to Christmas.

Paul Martin, UK head of retail at KPMG which compiles the data, said: “The final golden quarter of the year marks the ultimate test for many players, but retailers must also successfully navigate: the upcoming government Budget, Black Friday, Christmas, and of course Brexit.”

A survey by Barclaycard, also published on Tuesday, suggested caution was uppermost on consumers’ minds.

Almost half of people questioned said they were planning to spend less on the festive season than in 2017, the findings showed.



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