Greggs defies gloom with gross sales development regardless of value rises

UK bakery chain Greggs has defied hospitality trade gloom with a 15 per cent rise in gross sales in the latest quarter, regardless of pushing by means of a collection of value rises prior to now 12 months.

In contrast with the identical interval final 12 months, the group recorded a 14.7 per cent enhance in whole gross sales and a 9.7 per cent enhance in like-for-like gross sales. Its share value was up practically 10 per cent to £18.92 in early afternoon buying and selling in London.

The robust efficiency got here because the retailer pushed by means of value rises of between 5p and 10p throughout its product vary. Store closures on the day of the Queen’s state funeral in September additionally shaved 1 share level off gross sales development, the corporate stated.

One of the best-selling Greggs sausage roll now prices £1.15p, up from £1.10p when the final value rise was launched in Could. In December final 12 months, earlier than the succession of value will increase, it value simply £1. General value inflation for 2022 is round 9 per cent, the retailer stated.

Roisin Currie, chief government of Greggs, stated it was “actually pleasing” that the enterprise continues to commerce strongly.

She attributed a number of the firm’s success to having fewer costly gadgets than rivals, making it simpler to draw clients on the lookout for reasonably priced food and drinks at a time when many are fighting squeezed incomes and excessive inflation. “We’re working actually arduous to be sure that clients can nonetheless get worth from us.”

She added that she hoped Greggs may win new enterprise as shoppers commerce right down to beat rising costs.

“We’re a value-led enterprise, so it’s instances like this once we simply ensure that for these clients that possibly don’t learn about Greggs, or possibly don’t come into us very steadily, we are able to encourage them to come back extra to us,” she stated.

Julie Palmer, a companion at Begbies Traynor, stated the buying and selling replace advised Greggs might be a “scarce winner” throughout the price of residing disaster “as clients search to commerce right down to the extra reasonably priced menu in these troublesome instances”.

Greggs stated it had opened 106 outlets up to now this 12 months and was on the right track to extend its property by 150 shops by the tip of the 12 months. It presently has 2,271 outlets.

It additionally stated it had signed new ahead buy contracts to cowl power and meals provides for the fourth quarter. It expects that its power value hedging will preserve prices under the federal government’s enterprise power value cap of £211 per MWh for electrical energy and £75 per MWh for fuel.