‘Impressive’: Greggs sales jump by over a fifth as cost inflation eases across the business
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The high street bakery chain told shareholders that total sales increased by 20.8% for the 13 weeks to September 30, compared with the same period last year.
It also reported that cost inflation “has eased” across the business.
The group said its sales increasing comes after like-for-like growth of 14.2% for the quarter across its company-managed shops.
Greggs has benefited from its continued expansion, with the company seeing 82 stores opening already so far this year. This will take the number of its outlets to 2,410 by the end of September.
The bakery chain expects to open between 135 and 145 new stores this year.
The business is continuing to draw in customers, and has invested to grow its evening operation. Sales after 4pm now account for 8.8% of trade.
It has also significantly grown customer activity through its app, partnership with Uber Eats, and continuing to introduce new food and drink products.
A new “veg bhaji flatbread and cheese and honey mustard toastie” are among the new vegetarian products which are coming to its autumn menu.
Charlie Huggins, manager of the quality shares portfolio at Wealth Club, said it is “another solid performance” from Greggs “in a challenging economic environment” with “little sign so far of consumers cutting back on sausage rolls and pasties.”
Mr Huggins said Greggs’ performance is “mightily impressive” as its outlook at the start of the year “looked extremely unsavoury”.
He added: “But the economy has held up better than expected and the group’s execution has been excellent. With cost pressures easing, the business looks well primed for a return to profit growth in 2024."
Mr Huggins added: “The cost of raw materials, energy and wages have risen rapidly over the last year, but encouragingly these cost pressures are now beginning to ease.
“This isn’t just good news for profit margins but should also help underpin consumer demand by reducing the need for price increases.”