Greggs rolls out a growth warning

THE lunchtime stampede of office workers to the local sandwich shop is finally slowing down.

In a warning that should strike fear into the hearts of the rapidly-expanding new chains, Greggs - Britain's biggest baker - today said the £3.3bn industry could not keep growing at 10% a year.

Managing director Sir Mike Darrington said: 'As the industry gets more mature, it can't keep growing at those kinds of levels - otherwise everyone would be eating takeaway sandwiches for each meal every day.'

Greggs reckons that the market has expanded by just 7% in the past year. Meanwhile, it faces tougher competition from the likes of Subway and O'Briens Irish Sandwich Bars, which are expanding rapidly, along with the more established Benjys.

However, pre-tax profits beat City expectations, showing a record for the year to 27 December of £40.5m against £36.7m a year earlier. Sales were up to £456.9m from £422.6m before. Shareholders pick up a total dividend of 80p against 72.5p last year.

Having opened 68 new shops in the year, Darrington said his 1,231-strong chain was on track to meet his target of 1700 outlets and turnover of £1bn by the end of the decade.

Shares in Greggs today gained 10p to 3240p.