Sales growth improves but consumers cautious

SALES growth has improved at high street bakery chain Greggs in recent weeks but consumers remain cautious, boss Roisin Currie has said.

- TOM KEIGHLEY Business writer [e-mail]

The pasty, sandwich and sweet treats seller reported a 7.4% lift in sales to £784m across the first 20 weeks of the year, with 2.9% like-for-like sales growth compared with the same period last year. Better trading conditions over the last 11 weeks had given rise to improved performance, the retailer said.

Bad weather in January and customer worries about the cost of living had been blamed for a disappointing 1.7% growth in like-for-like sales across the first nine weeks of the year. Despite the more pleasing recent results, Greggs said the market continued to be challenging and volumes were slightly down though improving.

Ms Currie said data pointed to growth in consumer disposable income and that it would shortly see the positive impact of a rise in the National Living Wage, which has so far been in one pay packet.

But despite the additional spending power, consumer sentiment has continued to fall. She said: "What we've said previously is it looks like the consumer is saving and not spending even though they have got more money in their pockets."