A fall in profits badly damaged the share price of Greggs yesterday (February 26th), with the high street bakery chain losing nine per cent from the value of its stocks over the session.
Greggs announced that its pre-tax profits for the full year 2013 fell to £33.2 million, which was down from £52.4 million the previous year.
Chief executive Roger Whiteside stated that the company is going to focus on improving existing shops rather than opening new stores. It is also cancelling its attempted move into the coffee market under the Greggs Moment name.
He said: "2013 was a year of transition for Greggs as our new strategic focus centred on the growing food-on-the-go market. Whilst total sales for the year rose 3.8 per cent, like-for-like sales were down 0.8 per cent, reflecting the tough and competitive trading conditions."
Greggs moved its strategy back to selling takeaway food such as pies, pasties and sandwiches during the course of 2013, but still saw its profits for the 12-month period slip on the year before.
Greg Bromley, retail consultant at Conlumino, told BBC News that the outlook for the bakery chain is "fairly positive". He said: "The bakery chain's poor like-for-like performance over the past year is primarily due to its battle with the weather, with snow early in the year followed by the heatwave in July proving disastrous for sales of its hot pasties and other baked goods."
Mr Bromley added: "It must continue to improve its food-on-the-go offering, as this is an area that is becoming ever more competitive as grocers and others weigh into the market."
While stocks in the company fell by nine per cent yesterday on the back of the falling profits announcement it made, the share price of Greggs had recovered slightly in the early stages of trading today. By 08:38 GMT, its stocks were almost one per cent up for the day, but this gain fell to 0.73 per cent by 10:14 GMT.
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