Greggs has revealed that like-for-like (LFL) sales in its company-managed shops jumped 27.4% in the first 19 weeks of 2022. However, its performance was flattered by comparisons with restricted trading conditions due to Covid in the same period of 2021, with the bakery chain highlighting that it was facing significant cost pressures.
In a brief trading update, Greggs said its expectations for the full year were unchanged. In March, the group had warned that it did not expect material profit growth in the current year on the £145.6m it made in 2021 due to the surging cost of raw materials, energy, and staff.
“Looking ahead, market-wide cost pressures have been increasing and consumer incomes will clearly be under pressure in the second half of the year,” it said today.
Greggs noted that it was working to mitigate the impact of cost pressures to protect its reputation for value.
Like-for-like sales growth in the most recent ten weeks to 14 May, when pandemic lockdowns in 2021 were easing, had averaged 15.8%. Greggs said that it expected this figure to continue to normalise as it started to compare with more robust trading periods in 2021.
It also highlighted that sales levels in larger cities and in office locations were continuing to lag the rest of the estate as many people choose to work from home more. However, it said transport locations had seen a marked increase in activity in recent weeks.
Greggs opened a net 43 new shops during the 19 week period, taking the total to 2,224 (comprising 1,831 company-managed shops and 393 franchised units). The group has recently suggested that it sees potential for at least 3,000 sites.
“We have made a good start to 2022, with sales in line with our plan and a strong pipeline of new shop acquisitions ahead,” Greggs said.
