Bakery chain Greggs' success in fighting off the Government's unpopular pasty tax failed to rub off on the company's sales figures today.
Despite its profile being boosted by a 300,000-strong petition against plans to charge 20% VAT on its hot pasties and sausage rolls, the group's underlying sales were down 3.5% in the second quarter of 2012.
The group, which has 1,600 shops in the UK, said the deterioration from a decline of 1.8% earlier in the year was driven by the weather as shoppers stayed away from the high street.
Profits were down 4.6% to £16.5 million in the 26 weeks to June 30, despite its efforts to keep a lid on costs.
Meanwhile, the group announced plans to open 28 franchise stores in Moto service stations, creating 500 jobs, following two successful trials as part of plans to expand beyond the UK high street.
Greggs played a key part in the campaign to convince Chancellor George Osborne to overturn the tax plans after chief executive Ken McMeikan marched on Downing Street to deliver the petition.
Mr McMeikan said: "There's no question that the profile of Greggs is significantly higher than it was before the pasty tax started.
"But we were not able to see how much that has benefited sales - the Chancellor announced the tax in March but in April it started raining and didn't stop.
"This really is a very resilient performance, given the exceptional weather."
Its margins had been squeezed partly as a result of higher promotional activity, including a Lunch For Less campaign that offers baguettes for as little as £1.
The Newcastle-based group has opened 33 more shops than it closed this year and is on course to open a record 90 outlets in 2012. The openings helped push total sales up 4.5% to £350 million.
The new shops opened by Moto will be in addition to the 90 stores Greggs plans to open, although it was unable to say when they are likely to be up and running.
Mr McMeikan said the group's London stores have benefited from the first week of the Olympics, with like-for-like sales up 10%. Some shops have seen growth of up to 80% and its shop in Westfield has smashed all records for the week.
Greggs has been trialling new formats in new locations such as bus and train stations and will open its fifth "Greggs moment" coffee shop, in Gateshead, this week.
It has also trialled a new Greggs the Bakery format, which offers olive breads and herb focaccias, in Newcastle, doors away from where its first store was opened in 1951.
Sales of its products through frozen food retailer Iceland have also proved successful as it eyes the home baking market.
The group warned that a drought in the US threatens to push up grain prices but it has already pre-bought 80% of its food for the second half of this year, leaving it in a strong position as it looks to keep prices down.