Greggs blames hot weather for melting sales

The sandwich shop and bakery chain Greggs blamed the hot weather the UK has been enjoying for the past two months for a slump in sales of sausage rolls, buns and cream cakes.

"As it gets warmer, people cut down on confectionery like cream cakes and doughnuts and they start eating ice cream and we don't supply ice cream. We also lose in the savoury area - sausage rolls and pasties and things like that," said Mike Darrington, Greggs' managing director. "And then, when it's very hot, even sandwiches goes wrong because a lot of people just don't really feel like eating at lunchtime. They might just have water," he said.

In the first seven weeks of the second half of Greggs' financial year - covering most of the balmy June and July period - like-for-like sales were up just 1.5 per cent compared with a 4.7 per cent rise in the first half of the year. Mr Darrington pointed out, however, that in the first six weeks of the second half, like-for-like sales were one per cent ahead and then, in the seventh week, were up 4.6 per cent benefiting from cooler weather.

"As soon as the weather got a bit cooler, the like-for-like sales shot up again," he said, but noted: "If you look at the data, June and July were the third hottest on record."

Greggs, which has 1,211 shops and which plans to open another 40-50 next year, reported a pretax profit of £12.3m for the 24 weeks to 14 June, up from £10.8m a year before. Shares in the Greggs and Bakers Oven chain, which employs close to 18,000 people, dropped nearly six per cent, or 187.5p, to finish at 3012.5p.

Mr Darrington was not unduly concerned about the effect that continued hot weather might have on the business, saying: "It's a short-term heatwave issue."

Analysts said that the Greggs' statement would be the first of many profit warnings that blamed the unusually hot weather for poor trading.

But the weather is not always to blame for corporate underperformance. The high street retailer New Look blamed high demand for cheap, skimpy tops for a disappointing sales performance. A spokesman said high-fashion items like skimpy tops had been selling well but at relatively low prices.

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