High street bakery chain Greggs (LON:GRG) reported a 7 percent boost to sales on Tuesday, but warned of inflationary pressures and a “challenging” environment in 2017.
Total sales hit £894.2 million in 2016, up from £835.7 million the previous year. Pre-tax profits hit £75.1 million, a 2 million increase on 2015’s figures.
Operating profit rose 8.6 percent, with the preliminary full-year results from the company demonstrating a “growing strength in the food to go market”.
However, shares fell on Tuesday as investors took note of Greggs warning on performance going forward. Chief executive Roger Whiteside said “industry-wide pressures emerging in commodities as well as labour costs” would likely have a negative effect in 2017, with the UK consumer outlook “challenging”.
“However we are confident of making further progress as we implement our plan to grow Greggs as a contemporary food-on-the-go brand,” he added.
The strong results show progress in the chain’s plan to shift from being a traditional bakery to focusing on the £6 billion food-to go market, announced in 2013.
Shares in Greggs were trading down 3.15 percent at 979.12 by 1003GMT.
