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Saturday, 19 April 2014

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Greggs boss hails 'very resilient performance' during bad weather

Bad weather has been blamed for washing away traditional customers away from the high street and Greggs.

The hot pasties and sausage roll specialists, which employs around 280 people at its 31 branches across Cumbria, said underlying sales were down 3.5 per cent for the second quarter of 2012.

Underlying profits or sales take away items that can distort a company’s overall trading performance, like exchange rate movements or acquisition costs.

Profits for the period were down 4.6 per cent to £16.5 million in the 26 weeks to June 30, but total sales for the year are up 4.5 per cent to £350m. More than 100 people work for Greggs at its £4.5m North Lakes Bakery at Eden Business Park, Penrith.

It is a Centre For Excellence and its opening in September last year was hailed as a coup for Cumbrian industry.

The Penrith bakery supplies over 1,540 Greggs shops nationwide and all of the Cumbrian outlets.

The company was thrust into a big political campaign earlier this year after Chancellor George Osborne floated plans for a pasty tax, which would have extended 20 per cent VAT tax to its hot takeaway food.

Greggs became a highly-visible opponent of the plan and benefited from round-the-clock exposure of its brand. However, it didn’t materialise in more customers, the firm admitted.

Chief executive Ken McMeikan, 47, from Hexham who was appointed in 2008, marched on Downing Street to deliver a petition.

Commenting on the latest figures, 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.”

The new 2,400sq metre factory at Penrith made 2.8 million goodies in its first month.

Mr McMeikan said the London stores have benefited from the first week of the Olympics, with like-for-like sales up 10 per cent. Some shops have seen growth of up to 80 per cent and its shop in Westfield, London, smashed all records for the week.

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