Despite a “challenging market”, Greggs saw its like-for-like sales climb 7.4% over the first 19 weeks of this year, with delivery sales, evening trade and increased participation in its app all driving transaction volume growth.
The food-to-go chain noted that its new over-ice drinks range, including coffee, flavoured lemonades and coolers, currently available in 300 shops, was performing well and will be rolled out to up to 700 shops in the coming months. Meanwhile, pizza boxes and other hot food continued to perform well, whilst its range of healthier choices was expanded further.
During the period, Greggs opened 64 new shops, reaching its 2,500th site last week (comprising 1,986 company-managed shops and 514 franchised units). Recent shop openings have included sites at Embankment underground station, four shops with Tesco and three with Sainsbury’s.
Greggs noted that the pipeline for the remainder of the year was strong and included a number of further opportunities with supermarket groups. It expects to achieve 140-160 net openings for the full year.
Greggs is currently building its logistics capacity to handle a store estate of up to 3,500 sites. Current investment projects at its Birmingham and Amesbury distribution centres are on track to deliver additional capacity by the end of 2024. A fourth production line at its Balliol Park in Newcastle has also been commissioned, and the company is progressing with the development of two new sites in the Midlands, which are expected to be operational in late 2026 / early 2027.
“We’re providing capacity for 3,500 because we can actually see a route plan in terms of the (geographical) catchments where we’re under-represented and also the locations where we’re under-represented,” CEO Roisin Currie told Reuters today. She highlighted petrol forecourts, retail parks and transport sites as locations of under representation.
The group noted that there was no change to its outlook for cost inflation, which it expects to be in the range of 4-5% on a LFL basis.
“Whilst early in the financial year, the Board’s expectations for the full year outcome are unchanged,” Greggs concluded.
NAM Implications:
- ‘Currently building its logistics capacity to handle a store estate of up to 3,500 sites’…
- …vs its current 2,500 outlets, has to be a pointer to Greggs intent.
- Time for suppliers to anticipate the obvious…
- …and gain a head start over rivals.
