Greggs has reported an “exceptional” six months of trading, with strong growth in both sales and profit.
The food-to-go business, which is now operating 1,984 shops, has seen sales across its business rise 14.7% to £546m in the 26 weeks to 29 June. Like-for-like sales through company-managed shops rose 10.5%.
Greggs said the performance had been driven by strong sales of traditional bakery items, the popularity of the new vegan-friendly sausage roll and growth in Fairtrade coffee, breakfast and new hot food options.
Hot foods are also being developed with the roll-out of cabinets supporting growing sales of new lines alongside Greggs’ existing hot sandwich range, and the company plans to launch trials of extended late opening hours in the autumn.
Greggs has extended its click-and-collect pilot to seven cities and its trial of delivery options to include Just Eat alongside its existing Deliveroo partnership.
“These trials are providing valuable learning around the operational approach that must be adopted to ensure that customers receive a great service, however they shop with Greggs,” stated the company.
The company also said it planned to increase investment in strategic initiatives in 2019, including further improvements to service levels in its shops and digital platforms, better availability of hot food and further enhancements to its reputation as a responsible business.
Greggs is continuing investment in its supply chain and, in the first half of 2019, completed the commissioning of new manufacturing lines for bread rolls in its Manchester and Enfield sites, doughnuts in Newcastle and cream cakes in Leeds.
The company said substantial progress had also been made in the construction of its distribution centre at Amesbury, Wiltshire, which is due to be commissioned at the end of the year.
Later in 2019, the company will expand distribution capabilities at its Treforest site in south Wales and start work on increasing production and frozen storage capabilities at the savoury pastry site in Newcastle upon Tyne.
Greggs opened 54 new shops over the period and closed 23, and continues to expect to open around 100 net new shops for the year as a whole.
The company’s underlying pre-tax profit margin grew to 7.5%, up from 5.4% in the first half of 2018, which Greggs attributed to strong sales growth and operational cost control. Underlying pre-tax profit (excluding property gains and an exceptional charge) was £40.6m, up from £25.7m the previous year.
“Greggs has delivered an exceptional first-half performance, building on the strong finish to 2018,” said chief executive Roger Whiteside.
“We have continued to make strategic progress with our programmes of investment in infrastructure, to support future growth, and in developing the products and channels to market that will help achieve our ambition to be the customers’ favourite for food-on-the-go.”