Greggs profits fall despite self-raising sales, Asos draped in cash

The UK's largest bakery chain has blamed 'challenging' trading conditions for a fall in profits, whilst Asos has posted record sales.

by Michael Northcott
Last Updated: 13 Jan 2015

Bosses must be thankful that the ‘pasty tax’ was never actually introduced (and let’s hope Osborne has no such howlers again today), since even without it, full-year profits fell 2.2% to £51.9m in 2012. The health of the business is looking ropey, because whilst this drop in profits came alongside a 4.8% rise in total sales, like-for-likes in the period (which strip out the effect of new store openings) fell 2.7%.

Chief executive Roger Whiteside said that the results were heavily influenced by the opening of 121 new stores over the course of 2012, saying: ‘We saw no let-up in pressure on our customers’ disposable incomes during 2012.’ He also described the insanely wet weather in the tail-end of last year as a ‘significant deterrent’ to would-be customers. Still, in a statement, the firm said that it is focusing new openings on areas near large workplaces to improve footfall.

In clothes (which would-be Greggs customers were obviously not wearing enough of in the rain), Asos has announced bumper sales growth of 34%, rising to £352.3m for the six months to the end of February. US sales grew a particularly strong 54% to £35.6m, a result that chief exec Nick Robertson said he was ‘delighted’ about. 

He added: ‘We remain positive about our outlook for the year to 31 August 2013, and continue to trade in line with expectations.’ Interestingly, Asos did not reveal its profits in its statement, but did reveal that 61% of its sales now come from overseas.

Swings and roundabouts for the retail world, but premise-less e-commerce looks to be a winner here…

Economy Retail

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