GREGGS has served up higher sales but the baker said its profits were hit by the extra two spring bank holidays.

The Newcastle company’s turnover rose by 4.2% to £321m in the six months to July 2, helped by the opening of 39 new shops during the first half. Like-for-like sales rose by 0.4%.

But the 1,526-store chain reported a £1.2m drop in operating profits to £17.3m before exceptionals and the impact of the public holidays, which the group calculates cost it £2m.

Chief executive Ken McMeikan said: “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.

“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.”

But he said Greggs was on track to open a total of 80 new stores this year, which would benefit total sales.

The company is also preparing to commission its new Newcastle bakery and Penrith confectionery bakery next month and is planning a further £2.5m investment to improve its savoury manufacturing plant in Newcastle.

The Greggs name has been in the national spotlight in recent weeks because of employee Helen Milligan’s performance on BBC1’s The Apprentice.

McMeikan said: “She now has a new, senior role as Head of Retail for Greggs South East, which sees her taking responsibility for more than 200 shops and 2,300 people.

“Helen is a great example of the talented individuals we employ throughout our business.”