Greggs has revealed a 19% slide in profits after admitting it lost ground to supermarkets and coffee shops in the £6 billion food-on-the-go market.
The bakery chain, which has more than 1,650 shops in the UK, posted underlying profits of £41.3 million after a dismal first half of 2013 caused sales for the year to be 0.8% lower on a like-for-like basis.
Chief executive Roger Whiteside said conditions were likely to remain challenging this year but that he has been encouraged by recent trading after underlying sales rose 2.1% against last January's snow-hit period.
He is increasing the focus of the business on food-on-the-go, which accounts for 75% of customer visits, rather than traditional take-home business.
The company admits it has underperformed the food-on-the-go market as convenience stores, coffee shops and fast food operators better met customer demands, particularly in traditional shopping centre locations.
Greggs responded by completing 216 shop refurbishments last year, with a similar number due under the food-on-the-go format in 2014. It expects to open 60-80 new shops and close a similar number of shops this year.
More than two-thirds of its new shops have been opened in locations away from high streets such as retail and industrial parks and motorway service stations.
Mr Whiteside said: "With online shopping set to change customer patterns over the long term we expect to reduce our exposure to locations where footfall is declining and increase our presence in travel, leisure and work-centred catchments."
It introduced a new pizza product that has become one of its fastest selling lines, as well as a range of 'heat to eat' sandwiches. In savouries it said it improved the fillings in its best-selling lines such as Steak Bakes.
Cost inflation has shown signs of easing recently but as previously stated Greggs said the costs of investing in its turnaround programme was likely to constrain profit growth over the next two years.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article