Greggs, which has 1,400 UK outlets, said increases in energy and ingredient costs were not passed on in full to customers.

It said poor weather caused like-for-like sales growth to slow to 3.9 per cent in the 16 weeks to October 4, although sales since mid-September picked up to show growth of 5.7 per cent.

Analysts had been expecting a pre-tax profits haul of around £48m for the year to the end of December.

Greggs said: "As a consequence of the period of slower sales growth and temporary margin impact from higher costs we are reducing our expectations of operating profit for the current financial year by some £3m."

Greggs said its desire to maintain the brand's value-for-money market position meant it had absorbed some of the recent impact on margins.

However, it added that prices for many ingredients were now stabilising, with reductions in some areas including vegetable oils and vehicle fuel.

"This, combined with tightened control of operating costs, promises a more positive outlook for operating margins in the final 12 weeks of the year," it added.

Greggs also said increasing pressure on household budgets had only resulted in a "modest erosion" in customer numbers and transaction values.

Shares closed more than six per cent lower yesterday, down 217p to 3209p as investors reacted to the profits downgrade.