Greggs shares fall as sales growth slows, Brexit bites

Shares of Newcastle-based bakery and “food-on-the-go” retailer Greggs fell 6% on Tuesday after it said in a third-quarter trading update that its rate of sales growth slowed down in the 13 weeks to September 28.

Greggs said its total sales rose 12.4% for the quarter.

But it added that company-managed shop like-for-like sales rose 7.4% for the 13 weeks, down from the 10.5% rise in first-half like-for-like sales at company-managed shops.

“Greggs continued to trade very strongly in the third quarter,” said the firm.

“As expected, the rate of year-on-year sales growth moderated as we came up against stronger comparative sales from the previous year, but sales were still up strongly, driven predominantly by growth in customer numbers. 

“In the 13 weeks to 28 September 2019 total sales grew by 12.4 per cent (2018: 7.3 per cent) and like-for-like sales in company-managed shops increased by 7.4 per cent (2018: 3.2 per cent). 

“Total sales have grown by 13.9 per cent in the nine months to 28 September 2019 and like-for-like sales have increased by 9.4 per cent.”

In its outlook, Greggs said: “As previously disclosed, we are preparing for the potential impact of the UK’s departure from the European Union by building stocks of key ingredients and equipment that could be affected by disruption to the flow of goods into the UK. 

“Overall input cost inflation is in line with our previous guidance to the end of the year, with pressures on both labour and food input costs.”

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