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Greggs shows resilience with quarterly sales rise

Linda Stewart — Tue, 04 Oct 2022 09:03:17 +0000

Baker and fast food chain Greggs says it traded well in its latest quarter, showing its resilience against the backdrop of a worsening cost of living squeeze.

Confidence levels among Britain’s consumers sank to a record low last month as they struggle with the accelerating cost of living.

However, Greggs, known for its sausage rolls, steak bakes, vegan snacks and sweet treats, said its total sales rose 14.6% over the 13 weeks to October 1 year-on-year, with like-for-like sales in company managed shops up 9.7%.

“Greggs continues to trade well in an environment where cost pressures are significant,” it said.

It kept its guidance for full-year cost inflation of about 9% and said it expected the full year outcome to be in line with its previous expectations.

Greggs said in March it did not expect material profit growth in the current year on the £145.6m made in 2021 due to the higher cost of raw materials, energy and staff.

Meanwhile, the Greggs boss said today that the company this week had introduced a further round of price rises, including for the sausage rolls it is famous for, as it battles rising costs.

“We have put a small number of rises across products as of yesterday, we’ve worked hard to mitigate that,” chief executive Roisin Currie said.

She said a Greggs sausage roll was £1.05 at the start of the year, but had moved to £1.10 in May and is now £1.15.

Price rises on other products were 5 pence to 10 pence.

Currie said she hoped it would be the final round of price increases this year but could not guarantee it.

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Greggs teams up with Primark to launch fashion range

Linda Stewart — Wed, 09 Feb 2022 16:55:22 +0000

Retailer Primark has announced it will launch an exclusive clothing range with the bakery chain Greggs.

A limited-edition, 11-piece clothing collection will be available in 60 Primark stores later this month.

Greggs will also open a 130-seater café in Primark’s flagship Birmingham store.

More details of what will be included in the clothing range will be shared nearer the launch date, but photos of a hoodie featuring the Greggs logo and the message “It’s a pastry thing” written along one arm have been published.

The two retailers teased the tie-up last week, when mannequins at several Primark stores were seen adorned with Greggs’ sausage rolls and steak bakes.

Raymond Reynolds, business development director at Greggs said: “Greggs clothing is something our customers have continually asked for, so it’s great that together with Primark we can now make our first official range available across the UK.”

Tim Kelly, director of New Business Development at Primark, added: “We want to give our customers incredible experiences in our stores and offer collections they can’t find anywhere else, with brands we know they love.”

The firms will also display their collection from 17-18 February at a pop-up boutique in Soho.

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Greggs battling supply chain difficulties as vegan sausage rolls run short

Linda Stewart — Mon, 22 Nov 2021 14:31:37 +0000

Greggs is working to minimise the impact of supply chain difficulties amid reports of shortages of its Vegan Sausage Roll.

The latest issues come as the company’s Q3 trading update reveal that availability of products and ingredients has been by lorry driver shortages. The bakery chain has also identified staff shortages as a problem.

“Like others, we’re seeing temporary interruptions which are affecting the supply for some of our products,” a Greggs spokesperson said.

“Our stock levels will vary from day to day but we are working hard to minimise any impact on the availability of our products.”

In September, Greggs CEO Roger Whiteside admitted supply chain problems were keeping him up at night.

“Sleep is a thing of the past. There’s never been a time like it,” he told a food trade show.

“Hopefully, it will settle down as the market rebalances but what we’re learning from restarting a giant economy is that we’re all in just-in-time supply chains of one form or another, no matter where we are.”

The Vegan Sausage Roll has been a popular product for Greggs since its launch in 2019. The high street chain has rolled out similar products since then, including the Vegan Steak Bake, the Vegan Sausage, Bean and Cheez Melt and the Vegan Festive Bake last month.

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Greggs warns of rising costs due to supply chain pressures and staff shortages

Linda Stewart — Tue, 05 Oct 2021 14:00:36 +0000

Greggs could be forced to reduce its range of baked goods due to supply chain issues and labour shortages, analysts say.

The high street baker warned that its costs are rising because trading has been hit by UK-wide labour shortages and disruptions to supplies caused by HGV driver shortages. The rising price of ingredients and supplies is also affecting the bottom line.

However, in a trading update, Greggs said it was confident about future trading and plans to accelerate its store openings to 150 a year as part of an ambitious target to double turnover over the next five years to around £2.4bn.

It said outlets have benefited from the August staycation, with like-for-like sales climbing by 3.5 % in the third quarter of the year, against the same period a year ago.

The company has more than 2,100 shops, but plans to expand to 3,000 over the next few years.

However Greggs says it has not been immune to supply chain pressures affecting the UK food and drink sector. It warned that it expects costs to climb over the next few months.

“Food input inflation pressures are also increasing; whilst we have short-term protection as a result of our forward buying positions, we expect costs to increase towards the end of 2021 and into 2022,” the company said.

Under pressure

Ross Hindle, analyst at Third Bridge, said: “From a pricing point of view, Greggs chose to pass on the chancellor’s VAT discount to their customers. They now face the tricky challenge of putting their prices back up when VAT increases to 12.5% at the end of September, and 20% in 2022.

“This may mean short-term margin pressure for the group especially in the face of rising inflation.

“Supply chain issues and labour shortages remain a key risk for Greggs with no end in sight. Temporary interruptions for some ingredients could result in the Group reducing its range and would hamper current momentum.”

Greggs says it is a credit to its teams that the company has continued to trade well over the third quarter with two-year like-for-like sales in company-managed shops rising by 3.5 per cent when compared with the same period in 2019.

“Growth was particularly strong in August when a ‘staycation’ effect was evident and remained in positive territory in September, with two-year like-for-like growth of 3.0 per cent in the four weeks to 2 October,” it said.

Delivery sales

“Delivery sales have continued to develop well, with 943 shops now involved in supplying customers through this channel.

“The broadening of our vegan-friendly food and drink options has been well received, notably the limited edition ‘Vegan Sausage, Bean & Cheeze Melt’ along with a ‘Vegan Ham & Cheeze Baguette’ and a vegan-friendly breakfast sausage.

“Pizza and savoury boxes are supporting the delivery channel and our autumn menu is now available in shops, featuring favourites such as pumpkin spiced latte and spooky bats and buns for Halloween.”

The company also said evening sales also present a significant opportunity and it hopes ultimately to expand two thirds of the estate into late trading.

“The introduction of delivery services has made many more of our shops viable in the early evening market and we believe that two thirds of our estate will ultimately be suitable for late trading (both walk-in and delivery),” the report said.

“In the short term our target is that 500 of our shops will be open until 8pm by the end of 2022.”

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