NEWCASTLE-BASED bakery chain Greggs is to create more than 500 jobs despite bad weather being blamed for poor sales.
The company saw profits in the first half of the year drop by nearly £800,000 despite its high-profile success in fighting the Government’s unpopular proposals for a “pasty tax”.
But even with the setback, the company announced it is to open 28 new motorway service station branches and push ahead with plans to have opened 90 other stores in 2012.
Yesterday it opened a new internet cafe for disabled people at the Percy Hedley Foundation’s Able 2 day centre in Forest Hall, Newcastle.
Chief executive Ken McMeikan, who marched on Downing Street to deliver a 300,000-strong petition against charging VAT on the firm’s hot food, said yesterday’s results were “very resilient” given the rain.
“There’s no question that the profile of Greggs is significantly higher than it was before the pasty tax started,” he said.
“But we were not able to see how much that has benefited sales – the Chancellor announced the tax in March but in April it started raining and didn’t stop.”
Other factors blamed for the fall in profits, at a time when sales were up 4.5% to £350m, is the introduction of more offers, such as the Lunch for Less campaign that sees baguette sandwiches sold for as little as £1.
However, Greggs says it is confident that despite a drought in the USA forcing up grain prices, it will be able to keep prices down as it has already bought 80% of the supply needed for the rest of the year. It also revealed sales of products through frozen food retailer Iceland have proved a success and that the new franchise deal with Moto could see 500 jobs created across the country.
Mr McMeikan said the group’s London stores have also benefited from the first week of the Olympics, with sales up 10% and some shops almost doubling sales.
The firm is also looking to open more branches in bus and train stations and will open its fifth Greggs Moment coffee shop in Gateshead this week.