Greggs benefits from Christmas shoppers' last-minute rush

Bakery chain Greggs said sales jumped almost 20 per cent before Christmas as shoppers refuelled at its stores during a last-minute rush to the high street.

The snow disrupted shopping patterns in the earlier part of December but Greggs said the record Christmas week meant sales were still higher in the five weeks to January 8 – up 0.6 per cent on a like-for-like basis and 3.5 per cent overall.

Total sales in Christmas week were up 19.6 per cent and by 16 per cent at a same-store level.

"The last minute rush by many shoppers, combined with a more favourable trading pattern where Christmas fell on Saturday, drove strong sales," it said.

Greggs reported a 26 per cent increase in sales of coffee over the Christmas trading period, while it sold more than eight million mince pies between November and the end of the year after a 19 per cent increase in the five-week period.

Despite the impact of the snow, Greggs said it remained on track to deliver profits in line with City forecasts and added that it was well positioned to make further progress in 2011.

The chain, which traded from 1,487 shops on New Year's Day, plans to open around 80 net new shops, creating more than 700 new jobs.

Chief executive Ken McMeikan paid tribute to staff for the record Christmas week and for opening 19 new shops in December despite the snow.

He added: "I can't speak highly enough about our people both for the smooth handling of our expansion programme and for the remarkable dedication that they have shown in keeping our shops open and our supply chain functioning during the exceptionally bad weather during November and December."

The strong Christmas week meant Greggs finished its financial year with like-for-like sales in positive territory by 0.2 per cent. Total sales were up 2.2 per cent.

Numis Securities left its 50.3m forecast for full-year profits unchanged, compared with the 48.8m reported a year earlier.

Analyst Andrew Wade also kept his neutral rating on the stock: "We remain encouraged by the earnings upside from the store roll-out over the medium term.

"However, we expect the shares to continue to tread water as the impact of input cost inflation in such a price competitive space remains uncertain."