Christmas Sales Down at Greggs

LONDON -- Greggs (LSE: GRG  ) this morning announced its Christmas and New Year trading update, with mixed news.

Like-for-like sales decreased 2.9% for the five-week trading period ending Jan. 5, 2013, with management pointing to a strong 2011 comparative that saw a 5.1% increase. However, total sales rose 4.3%, so the baker wasn't wholly a victim of its own success.

For the 2012 financial year, total sales grew 4.8% and like-for-like sales dropped off by 2.7%. The business continued to generate cash strongly and finished the year with a net cash balance of 19 million pounds.

Chief executive Ken McMeikan commented:

This is a resilient Christmas and New Year trading performance given the tough comparison versus last year when we had a particularly favorable trading pattern with Christmas Day and New Year's Day falling on Sundays.

We were encouraged by the performance of our refit program in 2012 including the new 'Greggs the Bakery' format. In the year ahead we will substantially increase investment in our core business by refitting 200-300 shops. In addition we expect to open 80-90 new shops, with around 30 closures, giving a net 50-60 new shops for the year.

Greggs expects the tough trading environment to continue into 2013, but it also believes it is well-placed to drive further growth, "having built strong foundations in 2012 for [its] multi-channel approach." Full-year results are expected to be broadly in line with expectations.

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