Tough Trading Conditions On High Street Holds Back Growth At Greggs

Sales growth at Greggs slowed in the first 18 weeks of its current financial year with the group blaming the tough trading conditions on the High Street.

Total sales in the period 7 May grew by 5.7%, although like-for-like sales in company-managed shops grew by only 3.7%, compared with a 6% increase over the same period last year. The group said that conditions on the High Street were softer in March before recovering in recent weeks.

Greggs said that improvements made to its shops and product range had help lift sales, adding that its hot sandwich range and extended breakfast menu had proved particularly popular with shoppers. The introduction of its flat white coffee also supported double-digit growth in the sales of hot drinks.

Over the 18 week period, Greggs completed 55 shop refurbishments and in total plans to refit around 200 shops this year. It has also opened 43 new shops, including 23 franchised units in transport locations. It closed 21 shops, giving a total of 1,720 shops trading at 7 May (comprising 1,592 company-managed shops and 128 franchised units).

The group said that shop openings continue to focus on new food-on-the-go locations and the relocation of existing shops to support further growth. In March, it opened its first company-managed shop in Northern Ireland, at Boucher Retail Park in Belfast. The shop is said to be trading well and in the next few weeks Greggs will open its first unit in central Belfast.

Looking ahead, Greggs said that input cost inflation would remain low despite increased wage costs. It added that with a strong pipeline of product initiatives and plans to invest in its shops and supply chain, progress for the rest of the year was expected to be in line with its previous expectations.