Forecourt giant EG Group is set to leverage the Cooplands bakery business alongside investments in foodservice as it strives for growth following the Asda deal.
The business revealed its strategy in a trading update for the three months to 31 March 2023, which was published just a few weeks after it agreed to sell the majority of its UK and Ireland fuel, foodservice, grocery, and merchandise business to Asda for £2.27bn.
Cooplands was among the assets retained by EG Group alongside 30 UK sites and ‘certain other foodservice brands’.
In the latest update, EG Group said it is to continue to invest in foodservice outlets in the UK and Europe and expand its ‘best-in-class’ foodservice proposition, which includes leveraging its ownership of Cooplands.
Scarborough-headquartered bakery Cooplands was bought by the forecourt operator in late 2021, with EG Group promising to open 30 new outlets a year through to 2026 shortly after. However, earlier this year it was revealed that the Hull production site and several shops could be closed following an in-depth review of the business as it looked to ensure the store estate was “fully aligned with our ‘modern bakery food-to-go retailer’ strategy”.
“The sale of EG UK&I to Asda is an important step for the group and provides a platform to further invest across our diverse international portfolio, where we continue to see compelling opportunities to accelerate our proven and successful strategy to rollout foodservice, and grocery and merchandise to create multi-purpose convenience retail sites across our estate,” said Zuber Issa, CBE co-founder and co-CEO of EG Group.
“Our future ambitions are unchanged and, following the Asda transaction, we will continue to operate across three continents and nine countries, benefiting from a strengthened balance sheet, strong cash generation and $6 billion of freehold property. This provides continued geographic diversification, scale and an unrivalled platform from which to grow.”
Notably, foodservice is among the areas of growth for the wider EG Group business which overall reported a 5% drop in Q1 revenue for 2023 versus the previous year. In contrast, foodservice sales increased by almost 15% driven largely by the group’s foodservice investment strategy, which also saw 88 new outlets opening since March 2022. As a result, total foodservice gross profit for Q1 was $192m on a constant currency basis – $17m or 10% above the prior year.
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