Bakery retailer Greggs said this week that there was "growing excitement" in its 1,336-shop business as it experimented with innovative formats and ranges.

MD Sir Michael Darrington told British Baker that Greggs was in a "learning phase" as it trialled ideas such as extended opening hours, range changes and new branding.

The retailer revealed plans to overhaul its business in December to meet "growing demand for more aspirational products".

One of Greggs’ experiments is a Fresh to Go branded shop with healthy eating ranges, which opened in Lincoln last month.

Three or four different trial store formats are currently being tested around the UK, Sir Michael revealed, of which the Lincoln outlet was the most radical. Greggs, the largest bakery retailer in the UK, will evaluate these trials during the year and incorporate successful ideas in the rest of the estate "in a gentle fashion".

Greggs was "very unlikely" to add a new sub-brand such as Fresh to Go to its business, added Sir Michael. Greggs was "experimenting in all areas" on range, he added, for example, trialling higher priced treat ranges, low-GI products and new cold drinks "as the mass market becomes more aspirational".

Sir Michael said that customers’ shopping habits were changing and so Greggs was experimenting with earlier and later trading hours to "satisfy demand for food on the go throughout the day".

Speaking this week as Greggs posted a drop in operating profit of 17.8% to £38.7m in the year to 30 December 2006 on sales of £551m, Sir Michael said 2006 was a challenging year, due to a fall in footfall and a £4.5m hike in energy costs.

The closure of its Bakers Oven business in Scotland and the North cost it £3.5m.

Sir Michael emphasised that Greggs was a "jolly good business" and that he had confidence in the future. Greggs had seen less reduction in footfall in the last three months and a 3.9% increase in like-for-like sales in the nine weeks to 3 March 2007.

He commented: "I firmly believe that the group is embarking on an exciting period of change and progress for this year and beyond." The group has also pledged to put more emphasis on refits and refurbishments in its estate this year.

l Ian Gregg, the son of the founders of the business, will step down from the board of Greggs at its AGM in May this year.