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Shares in British bakery chain Greggs fell more than 10 percent on Thursday, with the company blaming slowing sales on low consumer confidence.
In the last three months of the year, Greggs recorded a 2.5 per cent rise in like-for-like sales, up from 5 per cent in the previous quarter, due to “more moderate” footfall and consumer confidence in the run-up to Christmas.
The company said its performance reflected “a well-publicized and more challenging market environment in the second half of 2024.” He also warned of “further overall cost inflation” resulting from the measures announced in the October budget.
In November, Deutsche Bank predicted that Greggs would face additional costs of £97 million over the next two years due to increased employers’ national insurance contributions and other government policy changes. , and lowered the Newcastle-based group’s rating from “hold” to “sell”. .
On Thursday, Greggs said it had successfully “mitigated cost inflation in recent years” and added that rising UK wages should “provide support for customers”.
Annual sales exceeded £2 billion for the first time in 2024, an increase of 11.3% on the previous year. Deutsche Bank, however, stressed that the new figures showed a ninth consecutive quarter of slowdown in like-for-like sales.
Shares in the chain fell more than 10 percent to £23.50 on Thursday morning in London. Shares in retailers Tesco and Marks and Spencer have also been hit by uncertainty over inflation and rising costs.
Investec analysts said Greggs’ like-for-like slowdown in the final quarter of 2024 was more pronounced than expected and was “likely to continue” into the first half of 2025.
In a statement, Roisin Currie, chief executive of Greggs, said: “The decline in consumer confidence continues to have an impact on store footfall and spending”, adding that the group was nevertheless well placed “to cope to the headwinds we expect to see over the coming year.”
She added that Greggs, which opened 145 stores during the year for a total of 2,618, entered 2025 with a “strong pipeline of new store opportunities”.
The company raised prices about 4 percent in response to cost inflation, it said on a press call, but left prices unchanged for some of its least expensive products. expensive.
The update comes after data this week showed “minimal” growth in UK retail spending in the final quarter of 2024.
