Greggs cooks up rise in sales and its UK estate
BAKERY chain Greggs says it has made a good start to 2024 with sales increasing and its UK estate standing at 2,500 stores.
The Newcastle firm has released a trading update for the first 19 weeks of the year in which its total sales were £693m, a 13.8% rise on the same period last year.
Like-for-like sales were up 7.4% and the company added 27 more stores. Greggs said that a new range of iced drinks initially available at 300 stores had performed well and would be rolled out to another 700 sites. It also highlighted the popularity of pizza boxes and said it would extend its range of healthier choices, having recently launched a vegetarian pesto and mozzarella pasta dish, as well as feta and tomato pasta.
The start of the year had seen 64 new shops open and 37 close. Openings included a site at the Embankment underground station in London and locations within Tesco and Sainsbury’s supermarkets. Greggs said that the pipeline for new sites remained strong, and it was expecting to add between 140 and 160 shops during the year.
Investment to distribution centres at Birmingham and Amesbury was progressing well, Greggs said, and work would start soon on a fourth production line at its site at Balliol Park in Newcastle, close to its headquarters, which would increase production capacity at the site by 35%.
It is also working on plans for new manufacturing, logistics and distribution sites at Derby and Kettering.
The trading update said: “We have made a good start to the year with continued like-for-like growth in a challenging market, reflecting the strength of our strategic plan. There has been no change to the outlook for cost inflation, which we expect to be in the range of 4-5% on a like-forlike basis.
“Whilst early in the financial year, the board’s expectations for the full year outcome are unchanged.”
Speaking later, chief executive Roisin Currie said that staff costs remained the primary driver of inflation in the business.
She said: “The majority of cost inflation pressures that we face this year is wages. We put through a wage increase at the start of January.”
When asked about price increases, Ms Currie added: “We continue to keep that under review, making sure that we offer great value to customers.”
It comes after figures from the Office for National Statistics revealed that regular average wage growth across the UK remained unchanged at 6% in the three months to March.