Greggs staff member puts a doughnut in a paper bag.

Source: Greggs

Greggs sales are in double-digit growth despite a ‘challenging’ macroeconomic backdrop.

The business reported a 17.1% increase in sales for the first 19 weeks of 2023 compared to the same period the previous year. Total like-for-like sales went from £495m in 2022 to £609m.

The strong performance was in part due to the impact of the Omicron outbreak during the first nine weeks of 2022, Greggs said, although it still recorded an average sales growth of 15.7% for the 10 weeks to 13 May. The company said it expected this figure to continue to normalise as it annualises against the actions taken in 2022 to mitigate against inflation.

Menu development continued to support strategic growth objectives, with hot food and snacks such as chicken goujons and wedges proving particularly popular with customers.

Its Late Trade Pizza Deal also drove sales in the evening daypart, which had been identified as the fastest-growing period of business with hundreds of shops getting their opening times extended earlier this year. 

Greggs also continued to extend its vegan-friendly range, adding the new Vegan Mexican Chicken-Free Bake to its menu last month.

Alongside revenue growth, Greggs also grew its estate with 63 new shops opened during the period, including 25 with franchise partners. Travel appears to be a focus with recent openings including sites at Canary Wharf Station and Glasgow and Cardiff airports. As of 14 May, the Greggs estate stands at 2,365 shops, comprising 1,908 company-managed shops and 457 franchised ones.

Greggs Logistics lorry

Source: Greggs

Having targeted 150 new openings in 2023, the business said the ‘pipeline for the remainder of the year is strong’. Supporting further expansion were investment projects underway at Birmingham and Amesbury distribution centres that aim to deliver additional logistics capacity from the second half of 2024.

“We have made a good start to the year with sales in line with plans and continued progress on our strategic initiatives,” the company stated in its trading update. “Looking ahead, whilst we expect the macro backdrop to continue to be challenging, we are confident in making further progress.

“Although we expect to see ongoing material cost inflation, we have good forward cover on key commodities. Consumer disposable incomes are likely to stay under pressure, but we remain confident that our outstanding value proposition continues to be compelling. Whilst uncertainties continue, the board’s expectations for the full year outcome are unchanged.”