Greggs Reports Robust Year End Results But Warns Of Tougher Times Ahead

Greggs has revealed that its sales and profits both rose in the year to 31 December, although it warned that inflationary pressures and economic uncertainty could result in a tougher year for its business in 2017.

Total sales in the chain’s 1,764 outlets rose by 7% to £894.2m with like-for-like sales in its company-managed shops up 4.2%. Pre-tax profits rose 2.9% to £75.1m, with operating profits before exceptional items increasing 8.6% to £78.1m.

Greggs said its performance was supported by its growing strength in the food-on-the-go market. It made further improvements to its product range, including extending choice in hot drinks and hot food. Meanwhile, demand for its Balanced Choice range of healthier options continued to grow and now accounts for more than 10% of its sales.

During the year, 208 shops were refurbished with 92% of estate now transformed to its food-on-the-go format. The group also opened 145 new shops, although 79 closed.

Greggs said that 2017 had started in line with its expectations with like-for-like sales in company-managed shops up by 2% in 8 weeks to 25 February.

However, Chief executive Roger Whiteside warned of tougher times ahead. He said: “The UK consumer outlook is more challenging than we have seen in recent years, with industry-wide pressures emerging in commodities as well as labour costs.”

Whiteside added the he was “confident of making further progress as we implement our plan to grow Greggs as a contemporary food-on-the-go brand.”