Greggs is to add between 140 and 160 net new shops to its estate in 2024 after a “year of further progress” in which sales climbed by almost 20%.
In its Q4 trading update published this morning (10 January), the bakery chain reported that total sales had risen by 19.6%, up from £1.51bn in 2022 to £1.81bn for the 52 weeks ended 30 December 2023.
Like-for-like sales at company-managed shops were 13.7% higher than those seen during 2022, which it said demonstrated the popularity of the Greggs brand.
The like-for-like sales in the fourth quarter specifically grew by 9.4% compared to the same period the year prior, with the company continuing to improve transaction numbers and seeing a reduced contribution from price inflation as it progressed through the year.
Having recorded a 20.8% increase in total revenue in its Q3 trading update last year, Greggs noted the strong finish to the year reflected the favourable Christmas trading pattern and less disruption than in 2022.
“2023 was a year of further progress by Greggs,” commented Greggs chief executive Roisin Currie, who stepped up to the leadership role in May 2022. “I am proud of our teams, who did a fantastic job serving more customers as we continue to grow our shop estate and offer greater availability through digital channels and extended trading hours.”
Greggs opened a record 220 new shops last year, while closing 33 and relocating 42. This put its current estate at 2,473 shops nationwide (of which 1,970 are company-managed and 503 are franchises), as of 30 December 2023. It unveiled its landmark 500th franchise shop in Monktonhall services just off the A1 near Edinburgh.
The chain noted its new openings gave customers more convenient access to its products and services, whilst relocation activity expands its capacity in existing successful catchments. Uber Eats delivery availability had also been increased to 710 shops by the year end.
Currie said: “We enter 2024 with plans to continue to invest in our shops and expand supply chain capacity to deliver the growth strategy, supported by our strong balance sheet”. Ending the year with a cash position of £195m, up from £192m in 2022, Greggs revealed an expectation to open between 140 and 160 net new shops this year.
A fourth production line is currently being commissioned at Balliol Park in Newcastle upon Tyne to provide significant additional manufacturing capacity for Greggs savoury rolls and bakes. Work is also ‘progressing well’ to expand the logistics capacity of its Birmingham and Amesbury distribution centres, both of which are due to come on stream later in 2024.
Seasonal lines including the Festive Bake, Chocolate Orange Muffin, and Christmas Lunch Baguette were said to have been in high demand from Greggs customers in the fourth quarter, alongside shop-baked Sweet Mince Pies and festive hot drinks. Additionally, it noted pizza was still performing strongly during the day and into the evening, with pizza boxes and pizza bundle deals continuing to contribute to its growth.
“Our value-for-money offer, and the quality of our freshly prepared food and drink continue to evolve and position us well for further progress in the year ahead,” Currie added.
Given the strong trading in the final quarter, the board said it was confident that Greggs can deliver another year of good progress in 2024 as it continues its plans for sustainable growth.
‘As expected, inflationary pressures are reducing and with good forward cover on food, packaging and energy we anticipate a more stable cost base in the coming year,’ stated the company. ‘Wage inflation remains, although higher rates of pay across the economy will also provide support to consumer incomes.’