An employee wipes a counter at Greggs' new outlet at Gatwick airport

Source: Greggs

Greggs is looking to carry its strong trading momentum into the second half of the year, after first half results showed year-on-year revenue was up by over 20%.

The bakery chain reported total sales of £844m for the 26 weeks to 1 July 2023, an increase of 21.5% compared to the £694.5m from the previous year. Meanwhile, like-for-like sales in company-managed shops grew by 16% when set against the equivalent period of 2022.

Underlying profit before tax rose by 14.2% to £63.7m, an improvement on the £55.8m recorded in the Omicron-affected period in 2022.

However, the total excluded an exceptional net gain of £16.3m in respect to last month’s out-of-court settlement of Greggs’ Covid business interruption insurance claim with its insurer Zurich.

The company continued to carry a higher-than-normal cash position to support future investment in its significant growth programme, ending the period with a cash balance of £138.6m.

Greggs chief executive Roisin Currie

Source: Greggs

Chief executive Roisin Currie

“Greggs strong performance continued in the first half of 2023 as we deliver on our strategic growth plan,” said Greggs chief executive Roisin Currie. “With consumers remaining under pressure, we continue to offer exceptional value, which is reflected in our performance and growing market share.

“In the period we continued to open further new shops, extended trading hours into the evening and saw increased participation in the Greggs App. Our ambitious plans for growth are on track and our amazing teams are committed to realising the opportunity to become a significantly larger, multi-channel business,” Currie added.

It opened 94 new shops, including 33 franchised units, in the first six months of the year. Despite 44 closures, the company said it remained confident of reaching its target of 150 net new shops by the end of 2023, a third of which are expected to be franchises. As of 1 July, its total estate sits at 2,378 shops (466 franchises).

Greggs highlighted its growing presence in travel hubs, with shops opened in the first half at Glasgow and Cardiff Airports as well as Shepherds Bush and Canary Wharf Underground stations. Last week, it unveiled its 24-hour Gatwick outlet, which marked its first shop at a London airport.

The business said its ambition to operate more than 3,000 shops is supported by recent success in catchments where it is underrepresented such as retail parks, railway stations, airports, roadsides and supermarkets. Greggs now trades in Sainsbury’s, Tesco, and Asda, with plans for further development.

The brand is also looking to complete refurbishments of around 140 shops this year, providing a modernised look and enhancing capability for food preparation and digital collection.

Greggs commented that evening trade remained a significant growth opportunity, noting it was the largest segment of the food-to-go market by value, yet the one where it currently has the lowest level of penetration. Post-4pm sales were found to have grown more strongly than any other daypart and represented 8.3% of company-managed shop sales, up from 6.5% in the first half of 2022.

On the digital side, a new click & collect website was launched to offer improved customer experience, while operational service levels were raised and pick-up points adapted to better collections. A second delivery aggregator on top of the existing partnership with Just Eat was also said to be progressing well. The Greggs App, meanwhile, saw increased usage with 10.6% of company-managed customer transactions scanned in the first half of 2023 (up from 5.2% in H1 2022).

Greggs flatbread selection

Source: Greggs

New products launches in the first half of the year – including a trio of foreign cuisine-inspired flatbread options, and a Vegan Mexican Chicken Bake – helped to boost sales, while the Late Trade Pizza Deal was proving to be very popular, it said.

To facilitate its strategic growth plan, Greggs said it was investing in its supply chain and in technology, including plans to adding manufacturing capacity for it savoury rolls and bakes at Balliol Park in Newcastle upon Tyne with a fourth production line later this year. Redevelopment of its distribution centre in Birmingham has commenced, while work to extend its Amesbury distribution centre was set to start in the coming months.