Breakfast and balanced choices drive growth at Greggs

Bakery chain Greggs updated the market on its trading on Thursday, ahead of its annual general meeting on Friday, reporting that total sales were up 7.5% in first 19 weeks of 2017, compared to 5.7% growth in the same period last year.

The FTSE 250 firm said company-managed shop like-for-like sales in the period were up 3.6%, slightly down on the 3.7% seen a year ago.

A total of 87 shop refits were completed, with 42 new shops opened and 14 closures.

The firm said it made further growth at breakfast, in drinks and in its 'Balanced Choice' options on the retail side, as well as good progress with investment in its systems and supply chain.

“Customers increasingly recognise the quality and value of our £2 breakfast offer and we have invested further in capacity to meet this growing demand,” the board said in its statement.

“Balanced Choice sales continue to grow and we have added lines to this range, including cold-pressed juice drinks and a new selection of freshly-prepared salads and wraps incorporating flavours such as 'Coconut, Lime and Chilli Chicken'.”

The company had a total of 1,792 shops trading at 13 May, comprising 1,615 company-managed shops and 177 franchised units.

“New shop openings remain focused on new food-on-the-go locations, the relocation of existing shops and new catchments such as Northern Ireland and the south west of England.”

Looking ahead, Greggs said it made a good start to 2017, although the sales outlook remained uncertain in the context of slowing growth in disposable incomes.

“Input cost inflation is having a modest impact on margins in the first half of the year as expected, however we have increasing visibility of costs for the second half and anticipate this pressure to ease towards the end of the year.

“Whilst this pattern will constrain profit growth in the first half of the year we expect to make progress in line with our previous expectations for the year as a whole.”