Total sales grew by 10.8 per cent for the five weeks to 7 January, with like-for-like sales up by 5.1 per cent as the group sold 7.5 million of its sweet mince pies.

Sales of Christmas cakes overall rose by 27 per cent with coffee sales 21 per cent higher.

Over the whole of 2011, sales rose by 5.8 per cent with like-for-like sales 1.4 per cent higher.

Greggs has been battling higher food and energy prices all year and has continued to absorb the higher costs through promotional activity.

“Despite these pressures, we anticipate that we will report full year results in line with expectations,” it said.

The baker added it expects the tough trading environment will continue during 2012, even though some of the inflationary pressures eased towards the end of 2011.

“We expect another year of marginally positive like-for-like sales growth in 2012 while total sales will benefit from the opening of around 90 net new shops”.

The group had an estate of a total of 1,571 shops at 31 December with 84 net new openings in 2011.

Broker Espirito Santo said that while Greggs had a very strong Christmas it was boosted by Christmas Day falling on a Sunday, which meant the baker had in effect a full week of trading this year whereas last year the stores were shut on the Saturday.

Stripping out the impact of the VAT increase, annual underlying growth was also marginal though the broker said this was a very strong performance in the current environment.

Espirito expects profits of £52.9 million for 2011.

As at 11.10am, the company's shares were up 7.79 per cent today - changing hands at 91.35 pence.

Greggs (LON:GRG), the bakery group, reported this morning that sales were up 4.2 per cent during the 26 weeks to the start of July despite tougher trading conditions.

The firm opened 39 shops (a record number) during the period and delivered positive (0.4 per cent) like-for-like sales growth. It said it was on track to open 80 new shops during the year.

Operating profit, excluding exceptional items, was down at £17.3 million (2010: £18.5 million). But the firm said that adjusting for the expected £2 million negative impact of two additional public holidays during the first half of the year meant there was an underlying increase in operating profit of £0.8 million to £19.3 million.

Pre-tax profit, including exceptional items, was £24.7 million (2010: £18.6 million), which translated to earnings per share of 18.1 pence (H1 2010: 12.7 pence). The firm declared a dividend increased by 5.5 per cent to 5.8 pence.

Greggs described the first half performance as “creditable” in the light of very substantial increases in commodity prices during the period, which affected most key ingredients as well as Greggs’ energy-related production, retailing and distribution costs.

"Trading conditions have proved to be more challenging than we had expected and we do not anticipate that the second half will bring any alleviation of the tougher consumer spending environment with disposable incomes remaining under pressure,” said Kennedy McMeikan, Greggs’ chief executive. “We continue to experience substantial increases in commodity prices and are continuing to work hard to mitigate the impact on customers through business efficiencies and targeted promotional activity.”

The news prompted the broker to uphold its "sell" recommendation and project a decline in Gregg's profits in the first half, while noting that shares in Greggs are trading at a "significant premium to the market and the sector".

The world’s largest business to business bakery products supplier CSM said earlier this month that pressure from rising raw material prices has been materially worse than expected in the second quarter. Price increases by the Dutch food group failed to offset the impact of higher raw material prices, it said.

Yesterday, food producer Cranswick (LON:CWK) issued a similar statement.

The group said that the increase in input costs would impact its operating margins in the first half, leading to a decline in earnings compared to last year and weaker than expected full year figures.

Cranswick decided to raise prices to make up for the losses from higher input costs, but it was not enough to offset their impact on its operating margin.

As about a third of Greggs’ sales are in the “savoury” market, much of which is manufactured in house, its gross margins are likely to come under pressure, said Oriel.

Analysts at Oriel also noted that owing to increasing pressure on consumers’ disposable incomes, more of them choose to make their own lunches to save money, forgoing Gregg’s £1.99 meal deal.

“There will of course be customers who “trade down” to Greggs, but our view is that if people are willing to trade down from ASDA to Lidl or Aldi, then many will surely also be willing to cut their own sandwiches to save 50 pence a day,” said Oriel.

Based on these two factors, the broker upheld its “sell” recommendation for the stock, projecting its half yearly pre-tax profits to drop 3 percent year on year to £18 million.

“We have been wrong about Greggs in the past but stick to our guns with our negative stance in the light of the mounting raw material pressures,” said Oriel Securities.

Waitrose’s online retailing associate Ocado Group (LON:OCDO) told investors that the John Lewis (LON: JLH) pension fund has now sold all its shares in the company.

The fund had held around 10 percent of Ocado.

Occado stressed that the decision is part of the pension fund's investment management activities and as such it does not affect the commercial relationship between Ocado and Waitrose – a wholly-owned subsidiary of John Lewis.

The online retailer highlighted that it signed a new 10-year deal with Waitrose in May 2010.

On the London Stock Exchange investors reacted badly to the news with Ocado shares falling around 15 percent in early deals.

Maiden prelims revealed it made a pre-tax profit of £300,000 in the final three months of the year, but was in the red to the tune of £12.2 million in the 52 weeks to November 28. Around £3.5 million of that figure was related to the company’s stock market float in July last year.

Chief executive Tim Steiner said: “This was a landmark year for Ocado with gross sales up 29 percent for the year. We have delivered on the targets set out at the flotation.  

“We have continued our focus on improving the customer offer, which has led to a record number of customers and sales with the achievement of profitability in the final quarter.  Ocado’s growth continues to outpace the market.”

For the year, Ocado’s average orders per week increased by 31 percent to 92,916. Items delivered exactly as ordered were 99 percent for the year. Deliveries on time or early were 95 percent for the year.

Ocado, founded by three former Goldman Sachs bankers in 2000, said full-year earnings before interest, tax, depreciation and amortisation  surged 138 percent to £22 million, beating analysts' forecast of around £21.2 million. Gross sales climbed 29 percent to £551.1 million.

It said sales in December rose 26.7 percent, despite the Arctic weather which affected many of the traditional bricks and mortar businesses in the sector. 

Ocado said gross profit margins remained stable and earnings before interest, tax, depreciation and amortisation were in line with its expectations.

The company’s upmarket offering based around Waitrose goods appears to have been a real winner this Christmas as customers preferred to have their groceries delivered rather than brave the snow and ice to venture out to the supermarket.

However the market appears to have anticipated the stellar performance as the shares fell 1.7 pence to 184.3 pence in early deals. In the past three months they have risen almost 43 percent.

However the stock is still just a smidge over the last year’s 180 pence floation price after the group endured a rather rocky introduction to the public markets. 

Sales in the 26 weeks to 3 July rose 2.9% to £321 million, while like-for-like sales were up 0.7%. Operating profit jumped 13.1% to £18.5 million and pre-tax profits increased 12.3% to £18.6 million. Net cash stood at £24.6 million compared to £14.9 million a year earlier.

The group has opened a total 26 shops for a net increase of 18 shops in the period.

Greggs pledged to deliver another year of progress, but noted that the trading environment is going to be challenging as ingredient costs are set to rise in the view of the recent surge in wheat prices as a result of a record drought in Russia. Wheat prices have recently hit two year highs after the country banned exports until at least 31 December.

“We have delivered a resilient first half performance under challenging conditions with total sales growth of 2.9% and marginally positive like-for-like sales growth, in line with our expectations.  Our accelerated shop opening and refit programmes are progressing as planned, and delivering encouraging early results...the pressure on the trading environment looks likely to increase in the second half and we remain focused on managing costs tightly,” said chief executive Ken McMeikan.

The group is about to begin the first phase of its supply chain investment programme.

Shares in Greggs slid more than 3% after the report was released.

"I am very pleased with our sales performance, particularly over Christmas, in what has remained a challenging trading environment for the high street”, Greggs chief executive Ken McMeikan said, "We remain positive about our growth opportunities as we begin our programme of accelerated expansion.”

The FTSE250 constituent expects its preliminary results to fall in line with expectations when they are published in March.

During the week of Christmas the high street baker sold more than one million mince pies and over two million festive bakes, serving 250,000 more customers than the previous year. Compared with 2008, total sales for the week were up 6% representing a 4.4% increase in like-for-like sales.

As planned, during the year the group opened 49 new shops and closed 39, making a net addition of 10 new shops and a total of 1,419 at 2 January 2010. Greggs intends to add between 50-60 new outlets during 2010.

The group’s sales increased 2.3% to £46.8 million during the 14 weeks to 3 October, while like-for-likes were up 1.3%.

The comparative period included sales to Birthdays Ltd, which went into administration, driving Thornton’s Franchise sales down 15.2% to £2.9 million. Thorntons Direct sales rose 2.4% to £1.1 million, while commercial sales increased to £15.7 million, marking a 7.2% improvement compared to Q1 last year, the last full quarter of sales to Woolworths, which was one of the group’s largest customers at the time.

Thorntons said 48 stores had already been opened with new franchisees, with another 23 expected to start operating before Christmas, which is its key trading period.

“We are in the process of adding several products to our offering and have just launched the new Christmas range in our stores. We continue to innovate and improve our performance which puts us in a good position ahead of our key Christmas trading period,” said chief executive Mike Davies.

The group added 4.5% in early trade following the release of the update.

According to today’s update Bookers first half’s trading has improved on last year, non-tobacco sales were strong compared to last year gaining approximately 9%, similarly like-for-like tobacco sales increased by 5%. Profits for the full year remain in line with management expectations.

Booker also stated that they had made a substantial reduction to their net debt which now stands at £4m, down from £28.9m this time last year.

Thorntons reported a 3.2% year on year increase in revenues and an 80% reduction in operating costs, which was hailed as “excellent cost control,” while pre-tax profits declined 4.5% and earnings per share (EPS) slid 40.7% to 5.4p on higher tax charges.

The broker said the clean pre-tax profit of £6.3 million was unexpected and the prospects looked brighter than seemed possible last February when the forecast range for Thorntons’ pre-tax profit was between £1 and £5 million and the consensus of £5.4 million in July.

The final dividend was unchanged at 4.85p, which FinnCap said was surprising.

Throntons experienced a dire Christmas period last year when its sales normally peak, being forced to participate in promotions due to lower customer confidence. FinnCap said that this time the management is better prepared and efforts are in hand to pull some Christmas sales forward and all eyes will be on the company’s Q2 sales update, which will include Christmas.

FinnCap said the strategy was unchanged with the emphasis remaining on growing the top line via increasing all year round product sales and containing costs.

The broker projected EPS of 7.35p for 2009 followed by 9.45p for 2010 and set the target price at 132p per share based on a 14x multiple of calendarised 2010 EPS, while a mini re-rating looked warranted.

Thorntons added over 2.5% on the London Stock Exchange this morning.

These results are in line with expectations and consistent with the group's previously announced target earnings, it said. Total Produce confirmed it continues to target adjusted earnings per share in the range of 5.5 to 6.5 cents per share for the full year.

The interim dividend is maintained at 0.54 cent per share.

For the second half of the group's financial year, comprising the 28 weeks to December 27 2008, total sales rose 6.6 percent, a like-for-like sales growth of 3.9 percent. This gave total sales growth for the full financial year of 7.1 percent, including like-for-like growth of 4.4 percent.

During the year, Greggs opened 67 new shops and closed 26, making a net addition of 41 shops and a total of 1,409 at December 27.

Chief executive Ken McMeikan said: “I am pleased with our Christmas trading performance, particularly given the current economic environment and that we were building on strong like-for-like sales in the same period last year.  I expect to report 2008 results in line with expectations. The trading outlook for 2009 is demanding and customers will continue to feel the impact of the economic downturn. As a cash generative business with no debt we remain well placed to weather the recession and benefit from opportunities for future growth.”

This results in an overall sales increase of 0.8 percent for the 26 week period to date.

In a trading, the company said own store sales declined by 5.4 percent to £51.8 million ithe reported period. Like for like sales during the period decreased by 6.6 percent with three new stores added to the estate.

Franchise sales showed an increase of 2.7 percent to £6.2 million, mainly driven by the addition of nine new franchisees, resulting in a total net increase of eleven in the year to date.

Commercial sales continued to grow by 5.9 percent from the previous Christmas trading period to £15.6 million driven by improved distribution among the major multiples and new product launches. This growth was achieved despite the loss of Woolworths as a customer.

Sales in Thorntons Direct grew by 3.5 percent year-on-year to £4.0 million. While direct sales to consumers from the call centre and the website continued to grow strongly with sales from the website growing by 24.7 percent, the corporate business continued to decline during the period.

Chief executive Mike Davies said: “Under these circumstances, the board expects profits for the 28 weeks ending January 10 2009 to be not less than £7.0 million with EBITDA in excess of £14.0 million.”