Greggs has today posted robust first-half results and noted that it has not seen any significant changes in spending patterns in its stores due to the cost of living crisis.
The food-to-go chain saw its total sales climb 27.1% to £694.5m over the 26 weeks to 2 July, with like-for-likes growing 22.4% as the business recovered from the effects of Covid restrictions last year. LFL sales were also 12.3% higher than the comparable pre-pandemic period in 2019.
However, pre-tax profit was flat at £55.8m, which Greggs said was primarily due to the re-introduction of business rates, an increase in VAT, and higher levels of cost inflation.
During the period, Greggs opened 70 new shops and closed 12 to leave a total of 2,239 stores at the period end. It also made its offering more accessible to customers with extended trading hours and introduced new products focused on healthier choices, hot food and the evening daypart.
“In a market where consumer incomes are under pressure Greggs offers exceptional value for customers looking for food and drink on-the-go,” said CEO Roisin Currie.
“We are well positioned to navigate the widely publicised challenges affecting the economy and continue to have a number of exciting growth opportunities ahead, with a clear strategy for expansion.”
Speaking to Reuters later in the morning, Currie said: “As of yet, we haven’t seen changes in customer behaviour.
“We’re expecting more pressure on our consumers as we go into autumn with the energy prices, so we will continue to stay very focused on it and continue to watch the market.”
Currie noted that when Greggs raised prices by 5 pence to 10 pence in May, it did not see an impact on transactions. She speculated that with Greggs having an average spend of just under £4, customers were still comfortable parting with their money.
Meanwhile, Greggs today named former Tesco executive Matthew Davies as an Independent Non-Executive Director and Chair designate. He will join the company’s board immediately and take over as Chair on 1 November, when the current Chair, Ian Durant, steps down.
Davies’ career includes CEO positions at Tesco UK & Ireland, Pets at Home, and Halfords. In addition, he chaired N Brown Group from 2018 to 2021, and was on the board of Dunelm from 2012 to 2015. He is currently Chair of private equity-owned Hobbycraft.
Durant said: “Greggs has undergone a transformation over the past decade, and I am proud to have contributed to its achievements as Chair. Greggs has entered a new era, now under Roisin Currie’s leadership, and the business is in great shape with a clear strategy. I welcome Matt Davies as my successor as Chair and wish him well.”
Davies added: “Greggs is a great business and a brand that I have long admired. ‘’m looking forward to working with the Board, Roisin and the senior management team to further develop the business over the coming years.”
