Greggs shares hit after sales and profits fall
High Street baker Greggs' shares have fallen more than 7% after it reported falling sales and profits.
Like-for-like sales, which exclude new outlets, fell 2.9% in the first half of 2013, partly due to cold weather at the start of the year. Recent trading has also been hit by July's heatwave.
Half-year profits fell by £4.6m to £11.4m, and it warned annual profits would now be £3m lower than expected.
Greggs said it would now reshape the business and speed up its shop refits.
"We will spend the next two to three years reshaping the business as we build the platform for long term sustainable profit growth," said Greggs chief executive Roger Whiteside.
Greggs said it would focus on improving existing shops rather than opening new stores, with plans to refit up to 240 shops in the year.
It will also launch a customer loyalty scheme to try to win more customers.
The changes will result in one-off charges of up to £8m in the second half of the year, Greggs said.
It said a trial of entering the coffee market with a stand-alone chain Greggs Moment would not be continued. Instead it will incorporate its coffee business within the existing shops.
Greggs also warned that the current heatwave had hurt trading in the five weeks to early August, with the popularity of lower margin cold drinks also affecting profits.
Greggs is a huge presence on UK High Streets, with almost 1,700 outlets.
So far this year, it has seen the addition of 19 new shops, which has helped increase total sales by 3.4%.