May 9, 2018

Greggs profit warning signals spread of UK retail woe

Shares in Greggs fell by almost a fifth on Wednesday after the high street bakery chain warned on full-year profits and analysts pointed to a retail downturn even at the cheapest end of the high street. The news came as pub operator JD Wetherspoon reported a recent slowdown in sales and data showed a record slump in British retail sales for April. Greggs, which sells £2 breakfasts and sausage rolls for under £1, blamed "Weak customer footfall in retail locations" for sagging demand for its food-on-the-go and warned that underlying profits for the full year would not be any higher than they were in 2017, when it notched up £81.3m of earnings on this measure. Retail sales declined by a record 4.2 per cent in April compared with the same month last year, according to the British Retail Consortium. Some investors opposed the deal because of pessimism over the prospects for retail landlords.

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