The sausage roll and sandwich group, which has more than 1,200 branches across the UK, announced a 2% rise in sales since August, with things "improving" more recently.

In June and July, the like-for-like sales growth had only been 1.5%.

The firm has also had to deal with higher flour prices, after the summer heatwave affected grain harvests across Europe.

It said it had been reining in costs, in a bid to protect its profit margins.

Managing director Mike Darrington said: "Although our market place is undoubtedly becoming more competitive, we believe that the actions we are taking will enable us to report a year of satisfactory progress."

The chain is continuing to expand, with 35 new branches planned by the end of 2003.