Greggs has delivered another strong rise in sales in its latest quarter, although the rate of growth slowed against tough comparatives with the same period last year.
In its third quarter to 28 September, the food-on-the-go retailer’s like-for-like sales in its company-managed shops grew 7.4%. This compares to first-half growth of 10.5%, which was partly fuelled by the success of a new vegan sausage roll.
Total sales for the year so far are up 13.9%, buoyed by the opening of a net 56 new shops (90 openings less 34 closures). The 2,000th Greggs outlet opened in August, with it planning to have opened a net 90 new stores by the end of the year – slightly down from its previous forecast of 100 in July.
Meanwhile, the group revealed that it was progressing trials to open some shops later into the evening, supported by an extended range of ‘post-4pm’ deals. Greggs added that it was also seeing encouraging customer response to its delivery service trials, which it has started with Deliveroo and Just Eat.
Looking ahead, the company stated that it was preparing for the potential impact of the UK’s departure from the EU by building stocks of key ingredients and equipment that could be affected by any disruption to the flow of goods into the country.
Greggs also noted pressures on both labour and food input costs, although it said overall input cost inflation was in line with its previous guidance.
The company concluded its trading statement by saying: “Operational cost control has been good and we are progressing selective investments in the strategic initiatives that we expect to deliver an even stronger customer proposition and further growth in the years ahead.
“We continue to expect that year-on-year sales growth in the balance of the year will reflect the strengthening comparatives seen in 2018, and our expectations for the full year outturn remain unchanged.”
Industry Insight:
Recent IGD research forecasted that the UK food-to-go market will be worth £23.4bn by 2024, up from £18.5bn in 2019, growing at double the rate of the wider food and grocery retail market.
You can understand the latest shifts in food-to-go shoppers’ attitudes and behaviour at the upcoming IGD Live event.
NAM Implications:
- What if, say, a £1.50 cup at Greggs became £3…
- With a market knock-on resulting in, say, Gail’s reaching £5.80 a shot…
- A shift to DIY costing 9p/cup based upon current Waitrose 275g French roast beans.
- Big changes coming, methinks…
