Bakery chain Greggs revealed a fall in Christmas sales yesterday as last month's severe wet weather saw shoppers stay away from the high street.
The group said many of its town-centre shops were hit by the rain and flooding in December as shoppers visited shopping centres or did their shopping online.
Newcastle-based Greggs saw like-for-like sales slide 2.9% in the five weeks to January 5, marking a further fall on the 2.6% drop seen in the quarter to October 6.
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As well as the bad weather, the group was also hit by consumer belt-tightening and rising costs of its key ingredients and warned it was expecting to pass on "modest" price hikes across its shops this year.
The Christmas sales fall comes as a further blow after it revealed last month that chief executive Ken McMeikan would be joining catering group Brakes.
Greggs, which has 1671 shops across the UK, said it expects tough trading conditions over the year ahead with consumers reining in spending and rising cost pressures.
Outgoing boss Mr McMeikan said the group would look to absorb some of the cost pressures but that the scale of the rises –up to 25% for flour, 10% to 15% for pork and as much as 10% for poultry – would mean price hikes.
"Sadly there's likely to be some increases for our customer, but it will be pennies," he added.
Greggs opened 121 shops during 2012 and closed 12, adding that 48% of the new outlets were away from the high street.
It has been expanding in locations such as stations, industrial parks and motorway service stations through its deal with Moto.
It plans to close another 30 stores this year and open up to 90, which will expand its estate by up to 60.
Sales over the 52 weeks to December 29 fell by 2.7%, the group added.
Analyst Wayne Brown at Canaccord Genuity said the Christmas sales performance was "lacklustre".