Bakery Chain Feels the Heat

  • Greggs warns on profits due to June heatwave impacting sales
  • Total sales up 6.9% to £1.03bn for the 26 weeks to 28 June
  • Like-for-like sales rose 2.6% in H1
  • Growth slowed sharply in June due to heatwave
  • Opening 87 new shops, targeting 140-150 net openings by year-end
  • Cost inflation and wage tax pressures cited as factors affecting profitability

Greggs, the UK-based bakery chain, has warned that its full-year operating profit will be ‘modestly’ below 2024 levels due to the June heatwave affecting sales momentum. Despite a strong first half with total sales up 6.9% at £1.03bn and like-for-like sales rising 2.6%, the scorching temperatures reduced footfall while increasing demand for cold drinks. The company opened 87 new shops in H1, targeting 140-150 net openings by year-end. Cost inflation and wage tax pressures are impacting profitability, but its cost inflation outlook remains unchanged.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Greggs’ financial performance, sales growth, new shop openings, refurbishments, and cost pressures. It also mentions the impact of hot weather on sales and the company’s confidence in achieving its targets. The only potential issue is the mention of a price increase on its iconic sausage roll, which may not be relevant to the main topic but does not significantly affect the overall factuality level.
Noise Level: 3
Noise Justification: The article provides relevant information about Greggs’ financial performance and its sales growth, as well as factors affecting profitability. It also mentions the company’s plans for new openings and refurbishments. However, it does not delve into any in-depth analysis or explore long-term trends or consequences of decisions on those who bear the risks.
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses Greggs’ financial performance, including its full-year operating profit expectations and sales growth. It also mentions the impact of high temperatures on sales and cost inflation pressures. However, it does not directly mention any specific financial markets or companies being impacted.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.retailgazette.co.uk