The number of Greggs bakeries keeps on growing but the company’s share price is charting a choppier path. This week, the shares made another about-turn.
Greggs revealed on Wednesday that like-for-like sales had fallen by 1.8% in the first 10 weeks of the year. The baker, which plans to open 90 new shops this year, taking store numbers over 1,600, was cautious about apportioning blame.
“It is too early to tell if this slower start is a sign of a more prolonged trend in sales,” said Greggs chief executive Ken McMeikan.
Investors made up their own mind. The share price dipped by 2% to 548p on the day, ending months of upward momentum fed most recently by news that sales in the final quarter of 2011 had shot up by 3.8%.
Greggs shares had taken a tumble over the summer, driven down by slow sales growth in the first half of the year and hikes in the cost of raw materials, notably wheat and sugar, that depressed operating profits.
Tesco shares also continued a rollercoaster ride this week. Britain’s biggest supermarket was buoyed mid-week by news that it would be would be upping the retirement age for its staff from 65 to 67 and cutting their pension pots.
However, the share price then went into reverse on Thursday when it emerged that Richard Brasher, head of Tesco in the UK, was quitting the business. The shock departure, combined with the admission by chief executive Philip Clarke to Reuters that “you can’t have two captains in a team” took 4p off the Tesco share price in early trading to 320.9p.
Meanwhile, the refinancing package secured by Premier Foods early in the week was greeted with muted approval in the City. The troubled food manufacturer extended the repayment deadline for £1.2bn of loans from December 2013 to June 2016 and agreed an additional £200m loan.
The announcement gave the share price a boost of more than 5% on Monday to 12p. The price remains a long way adrift from its year-long high of 35p, before the maker of brands such as Hovis, Bisto and Mr Kipling was forced to issue a profit warning last summer, following a pricing row with Tesco and the loss of an M&S contract.