Food-to-go chain Greggs stuck to its annual profit forecast today after its focus on value, expanding evening trade, and loyalty app helped drive sales up during its first half period.
In the six months to 1 July, the group’s total sales jumped 21.5% to £844m, with its company-managed shop delivering a like-for-like increase of 16%. As the cost of living crisis continues, the chain said it was gaining market share with its affordable food and the launch of new ranges.
Pre-tax profit, excluding exceptional items, rose by 14.2% to £63.7m despite a hit from higher costs. Greggs expects inflation to moderate during the second half to 7% from 11% in the first, putting the annual rate at 9%.
Chief Executive, Roisin Currie, commented: “Greggs’ strong performance continued in the first half of 2023 as we deliver on our strategic growth plan. With consumers remaining under pressure, we continue to offer exceptional value, which is reflected in our performance and growing market share.”
Greggs opened 94 new shops and closed 44 in the period, leaving a total of 2,378 stores trading as of 1 July.
The company noted that the continued extension of early evening trading was progressing, with it remaining the fastest growing daypart, representing 8.3% of sales. Greggs is also developing its digital channels to offer various delivery options.
Meanwhile, it now has several shops trading in Tesco (7) and Asda (5) stores, with plans for further development. And it also recently agreed a partnership with Sainsbury’s. Following a trial at one of Sainsbury’s forecourt sites in Bedfordshire, Greggs revealed last month that it plans to open half a dozen sites by the end of the year in the supermarket’s garages and grocery stores.
Giving an update on more recent trading, Greggs stated that the strong momentum it experienced in the first half has continued into the second, which means its expectations for the full year remain unchanged.
Currie added: “Our ambitious plans for growth are on track and our amazing teams are committed to realising the opportunity to become a significantly larger, multichannel business.”
NAM Implications:
- If access to a 2,300-outlet food-to-go estate operating at near 10% profitability on a value-based platform is of interest…
- …then Greggs may represent an under-realised opportunity.
- Time for a reassessment of your customer portfolio in the New Norm?
