Greggs’ sales boosted by lower costs

Greggs has been helped by lower costs
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Like-for-like sales (LFLs) at Greggs, the BB75 bakery retailer, have increased by 3.7% – helped by weaker comparatives and lower cost inflation.

In an interim management statement for the 17 weeks to 26 April 2014, Greggs said total sales were up 4%, driven by improved availability of fresh sandwiches, longer opening hours and the lower-than-expected cost inflation.

In the same period last year, the key performance indicator of LFLs was -4.4%, as Greggs’ trade was hit by the poor weather and snow.

In a statement the company said: “Market conditions remain highly competitive, but we are encouraged by the performance in the year to date. We have delivered continuing improvement in like-for-like sales, albeit against the weak comparatives of last year, and strong cost control.

Challenging

“The second half is likely to be more challenging as we come up against relatively stronger sales comparables and likely cost inflation. Overall we expect to deliver satisfactory financial results for the year and good further strategic progress.”

The company also confirmed it had finished the consultation period at 79 in-store bakeries and the majority would be shut by the end of the year.

During the period Greggs closed 28 shops, opened 20 new ones and refitted 66 sites. The company also benefited from its closure programme by selling freehold properties for £1.4m.

Commenting on the lower costs, Greggs said: “Cost control has been strong in the year to date and input cost inflation has been lower than we have experienced in recent years. As a result there has been some benefit to margin in the period. The business remains highly cash-generative and maintains a strong balance sheet position.”

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