Shares in baker Greggs fall as festive sales slow down
Baker Greggs, which is set to open its first fully operated outlet in Northern Ireland in the near future, saw its shares fall sharply after sales slowed down during the Christmas period.
The Newcastle upon Tyne-based chain, which runs 1,698 outlets, said like-for-like sales in the final three months of 2015 slowed to 2.3%, compared to same-stores sales of 4.7% across the year to January 3.
It blamed weaker footfall in some shopping locations, adding that it also faced tougher comparisons against the fourth quarter a year ago. Shares, which last year rose by more than 70%, slumped more than 13%.
Greggs is opening at Boucher Road Retail Park in south Belfast in March. The Belfast Telegraph first revealed the firm's plans to launch up to 50 units in Northern Ireland in October.
It already operates a concession in an Applegreen filling station off the M2 outside Belfast.
Greggs is the latest retailer to complain of tough trading conditions over Christmas. Last week, Sports Direct issued a profits warning, blaming poor trading on unseasonal weather over the festive period.
The baker also said in October that the new national living wage would put pressure on the group to raise the prices of its pasties and sausage rolls.
It added that although it was not planning price hikes, a higher wage bill could have an impact on the bakery chain.
Greggs currently pays its shop staff £7.11 an hour. But Chancellor George Osborne said in his July Budget that the UK's hourly minimum wage would increase to £7.20 for over-25s from its current level of £6.50 by April next year, and to at least £9 an hour by 2020.
Analysts at N+1 Singer said the "main uncertainty" at Greggs was around "wages and menu inflation", adding it expected greater clarity in the firm's annual results in March. Greggs said it refurbished 202 shops in 2015 and opened 122.