Local butcher Crawshaw (CRAW:AIM) cheapens another 6% to 33.38p on disappointing half year results - like-for-like sales negative, a widened loss before tax, no interim dividend - and a warning annual profit could fall 'materially' short of expectations.

Shares in the fresh meat and food-to-go retailer were butchered earlier this month, when it braced investors for today's profit warning by bemoaning suppressed high street footfall and aggressive meat promotions from the supermarkets. A savage sell-off demonstrated the dangers of investing in high-flying growth stocks which subsequently disappoint.

Interims aren't cutting the mustard with investors today. Though Crawshaw grew turnover 29% to £21.6 million in the half to July, reflecting its continued store rollout, like-for-like sales were down 4.4% and slumped in the second quarter.

CEO Noel Collett explains: 'We have made considerable progress with our store expansion program over the last 18 months but are very disappointed by the recent like-for-like sales performance as some of the price and range initiatives didn't resonate with customers as we had expected.'

Well-intentioned changes to the product range and prices backfired - like-for-like sales were down an alarming 15.8% in the opening seven weeks of the second half - yet Collett assures 'we are acting quickly to restore sales momentum by returning our focus to the local value-led proposition that has proved successful in the past', with the old fresh meat pack sizes, more lower price points reintroduced to local stores.

'We have already re-introduced a locally driven, value-led promotion strategy which is bringing more customers in store,' says Collett, previously an instrumental figure in the rapid growth of Lidl.

However, he warns 'we are disappointed with current trading and clearly the outlook for the full year will depend on the result of our actions, upon trading during the important winter and festive season, and upon the timing of our store openings. At this stage, however, we expect our full year profit to be materially lower than our previous expectations.'

Though sentiment towards Crawshaw has soured, it has a scalable, cash-generative business model. Having expanded its estate to 49 stores, Crawshaw is particularly upbeat about the potential of its factory shops, which sell predominantly fresh meat (no hot food-to-go offer) and have higher sales, lower operating costs and lower fit out costs than high street and shopping centre outlets.

'Our location and format strategy has always been one of operating a diverse portfolio across high streets, shopping centres and factory shop locations, and in the current trading environment, the performance of our West Bromwich factory shop has encouraged us to plan the trial of up to 2 further factory shops this year to test the predictability of the concept and inform the shape of the rollout programme for next year', explains the micro cap.

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