Bad weather hits Greggs' profits

Greggs did not pass on rising costs to its customers

Bakery chain Greggs has issued a profits warning, blaming poor summer weather and rising costs - which it decided not to pass on to customers.

The Newcastle-based company said it now expects its 2008 profits will be £3m less than previous targets.

Greggs made the warning as it said like-for-like sales slowed 3.9% in the 16 weeks to 4 October.

Despite higher energy and ingredients costs, Greggs said it kept product price rises to a minimum.

'Extremely poor weather'

Analysts had previously expected Greggs to make pre-tax profits of about £48m for the year to the end of December.

While Greggs said like-for-like sales fell in the 16 weeks to 4 October, due to "extremely poor weather in August and early September", they rose 5.7% over the final three weeks.

"The final outcome for the year will clearly depend on trading during the weeks ahead," said Greggs in its statement.

Greggs has 1,400 outlets across the UK.