Greggs is expecting a challenging end to the business year, predicting underlying sales will be negative for the rest of 2012.
The company has revealed their like for like sales are down 2.6 percent for the third quarter - a worse result than expected.
The results show a slight improvement on like-for-like sales in the previous quarter, which were down 3.5 percent.
But the company had hoped to see underlying sales rise more dramatically, forcing them to re-asses their predictions for the final quarter.
Bosses say the figures are a result of bad weather, flooding and cautious spending among their consumers.
There has been some positive news for the company with overall sales up 5.9 percent in the 14 weeks to October 6, 2012.
A Greggs spokesperson said the improvement was "driven by our strong new shop opening programme and continued success in wholesaling and franchising.
"Bake at home sales through Iceland also continue to perform strongly and 70 new motorway service shops have openened ahead of expectations."
“We remain cautious about the economic outlook. We expect consumers to continue showing restraint and now anticipate like-for-like sales to remain negative in the final quarter."
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