Greggs reports impressive results

Greggs has reported strong results for the first 19 weeks of 2023, despite the challenging economic backdrop. Like-for-like (LFL) sales in company-managed shops grew by 17.1%, though this was in part due to the impact of omicron in early 2022. General LFL sales growth in the 10 weeks to 13th May averaged 15.7%.

The bakery chain attributed much of its success to new menu development, with sales of hot food and snacks, including chicken goujons and wedges, showing particularly strong growth. Pizza and its growing plant-based offering are also apparently proving popular.
Total sales in the 19 weeks to 13th May 2023 were reported to be £609m, up from £495m last year. During this period, Greggs also opened 63 new shops, including 25 with its franchise partners.

Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, commented: "This is a solid performance from Greggs in a challenging economic environment, with little sign so far of consumers cutting back on sausage rolls and pasties.

“The cost of raw materials, energy and wages are all rising rapidly and Greggs is significantly exposed to all three. However, at least inflation appears to have stabilised and isn't getting worse. And crucially, sales are rising strongly, which is providing oxygen to help absorb cost pressures.

“Inflationary pressures will continue to bite in the rest of the year, holding back profits. However, Greggs is in a far better position than most retailers to weather the storm and is more than holding its own. Should inflation start to moderate, the business looks well primed to return to profit growth." 

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