High street bakery retailer Greggs has said its Balanced Choice and breakfast products have been popular over the summer months, as it released its third-quarter trading statement to 1 October.
The company saw total sales rise by 5.6% for the 13-week period with company-managed shop like-for-like sales up by 2.8%.
Greggs has now launched its autumn/winter menu, including new lower-calorie bakes and soups in the Balanced Choice range, along with new snacks with gluten-free options. These include chipotle pulled beef, fiery pulled chicken and onion bhaji burritos in its hot sandwich range. The burritos will go on sale across 1,200 Greggs stores nationwide and are priced at £2.75.
Speaking at a press conference, chief executive Roger Whiteside said: "There appears to be a big demand in the market for Mexican-style products and our hot-eating sandwiches have been very popular. Burritos are the latest addition to that range. We are constantly on the look-out to see what is happening in the market and for those things that might have broader appeal."
He also revealed that soup had been growing year-on-year for the retailer and said that this also lent itself to the demand for healthier, lower-calorie products.
Referring to breakfast, Whiteside said this was the fastest-growing consumption occasion for Greggs, but declined to reveal for what percentage of sales it now accounts. He said: "The breakfast phenomenon developing in the UK market has been going for about 15 years now. More and more people are becoming short of time in the morning and grabbing breakfast on the go. The value we offer at Greggs is outstanding; we have held our meal deal at £2 for two years now."
Talking about the company’s healthy Balanced Choice range, he revealed that this now accounts for 10% of Greggs’ sales and said he could easily see it taking a 20% share of sales in the not-too-distant future. "We are going to carry on in that direction as long as consumers want it," he said. "I cannot see that trend disappearing. The trend to eat more healthily is here to stay."
In the year-to-date, the company has completed 145 shop refurbishments and said it was on-track to refurbish around 200 shops this year. It has also opened 103 new shops, including 41 franchised units, primarily in transport locations, and has closed 58 shops, giving it a shop total of 1,743 as at 4 October. For the year as a whole, it said it expects to open 140-150 shops and close around 70-80, a net increase of around 70 outlets.
Greggs also noted that it was making good progress with its supply chain investment plan and the work to facilitate its new distribution centre in Enfield was now finished, with the site being brought into operation in the coming weeks. As a result, it will complete the previously announced closure of its bakery in Twickenham in November.
However, the company did point to "general industry-wide cost pressures" in the next year, which Whiteside identified as both an end to supply outstripping demand, as well as ingredient commodity price rises. "We are quite unusual among retailers in that we make most of our own food, so that gives us sight of ingredient costs. Lots of those items - proteins, oils, fats, flour, dairy - are priced in dollars, so look as if they are going to be going up in price. We will be fighting hard to mitigate those cost pressures."
He added that the company’s rationale in terms of its investment programme was unchanged by the EU referendum, however, and that the company would wait to hear more certainty in regards to how the market will operate under the new regime.
In September Greggs introduced a lower-calorie sourdough pasty to its range.