British baker Greggs warned on Wednesday that profit for 2018 was likely to fall short of expectations and be at a similar level to 2017, blaming a dip in consumer demand.
Greggs, which is transforming itself from a conventional bakery business into a broader takeaway food retailer, said like-for-like sales at company-managed shops rose 1.3 percent in the first 18 weeks of the year - a slowdown from growth of 3.2 percent in the first eight weeks.
Customer Traffic
The group said trading in March and April was hurt by a drop in customer numbers in retail locations, partly due to severe weather which also prevented some shops from opening.
Newcastle, northern England-based Greggs, which sells sandwiches, sausage rolls and pastries from 1,883 shops, said sales in May had started more strongly.
"However given the uncertainties over market footfall we are cautious in respect of the outlook for sales in the balance of the year," it said.
Prior to Wednesday's update analysts were on average forecasting a 2018 pretax profit before one off items of 87.1 million pounds, according to Reuters data, up from 81.8 million pounds in 2017.
Share Price
Shares in Greggs, up 17 percent year-on-year, closed Tuesday at 1,267 pence, valuing the business at 1.28 billion pounds ($1.73 billion).
Separately on Wednesday a survey by the British Retail Consortium (BRC) said overall UK retail spending contracted by 3.1 percent year-on-year in April - the sharpest drop since BRC records began in 1995.
While the plunge largely reflected the earlier timing of the sales-boosting Easter holidays the BRC also warned of a weakening underlying trend.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
