Greggs strong trading performance has continued into the third quarter, with total sales up by over a fifth thanks to increased customer visits and new shop openings.
In its Q3 trading update published this morning, the bakery chain reported a 20.8% rise in revenue for the 13 weeks to 30 September 2023.
Greggs also noted that like-for-like sales in company-managed outlets had gone up by 14.2%. It said this reflected ongoing development of its evening trading, digital channels and loyalty programme.
Evening trade (ie. sales after 4pm) was said to represent 8.8% of company-managed shop sales during the quarter, marginally up from 8.3% during the first half of the year. Meanwhile, use of the Greggs App improved from 10.6% in H1 to account for 13.1% of Q3 transactions.
Greggs also highlighted Circana data from August 2023, which had it leading the food-to-go market ratings in customer satisfaction and value for money. Its Autumn menu introduced some taste bud warming flavours to its line-up, with hot new items including Spicy Chicken and Veg Bhaji Baguette, Cheese & Honey Mustard Toastie, and Spicy Veg Pizza.
The company has opened 144 new outlets and closed 62, bringing its current estate as of 30 September to 1,928 company-managed shops and 482 franchised units.
Greggs said it expected a “record year for the absolute number of new shops opened” as it looked to further expand into new locations and relocate shops to better premises with existing successful catchments. Between 135 and 145 net shop openings are anticipated for 2023, with view to a “strong pipeline ahead for 2024”.
A total capital expenditure of £200m is expected to be made this year to support Greggs’ ambitious growth plans via extensions of manufacturing and logistics capacities. This includes a fourth production line at Balliol Park in Newcastle-upon-Tyne, slated for the coming weeks, and redevelopments of Birmingham and Amesbury distribution centres, both of which are due to come on stream in 2024.
Following a successful trial period, Uber Eats had officially joined Just Eat as a deliver partner for Greggs. The roll out on the Uber Eats platform is now being accelerated to have around 500 shops live by the end of this month, with further expansion planned for next year.
In its company outlook, Greggs noted that the rate of cost inflation had eased to allow it to annualise on the significant commodity-led increases experienced in 2022. It revealed strong product and promotional plans were also in place for the fourth quarter.
Whilst acknowledging the uncertainty in the economy as a whole and the very strong comparative performance of the business in the fourth quarter of 2022, the board were said to be anticipating the full year outcome to be in line with its previous expectations.
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