Greggs shrugs off strikes and cold weather to report £1.5bn in annual sales

Greggs saw a total annual turnover of more than £1.5bn last year as strong festive trading offset concerns over the potential impact of railway strikes and poor winter weather.

The Newcastle-based bakery chain, famous for its sausage rolls and pasties, revealed that total sales were up 23 percent last year, compared to £1.23 billion in the previous 12 months.

On a like-for-like basis, sales at group-operated stores grew 17.8 percent, up from 18.2 percent in the last three months due to strong demand for the company’s Christmas offerings.

Greggs noted strong interest in its Festive Bake and Salted Caramel Latte products, but said plant-based foods, such as its Vegan Festive Baguette, contributed “more significantly” to the trade.

This was despite strike breaks in recent months sparking a resurgence of people working from home, as well as bitterly cold winter conditions.

The FTSE 250 business is less dependent than other food-to-go competitors in the commuter or travel market, which has been most affected by a drop in trade since the start of the Covid-19 pandemic.

Greggs said sales growth also reflected the rise of the Omicron variant in the previous year, when demand was negatively impacted by the reintroduction of restrictions on day-to-day operations.

Group CEO Roisin Currie said: “We are entering 2023 with a strong financial position that will enable us to invest in stores and supply chain capacity to bring Greggs to even more customers in the UK.”

The company expects to open around 150 additional stores during the year to meet its target of 3,000 stores in the UK by 2028.

Greggs nevertheless warned of further material cost inflation, which has already forced the company to implement numerous price hikes on key items, including sausage rolls and steak bakes.

Consumer price inflation in Britain hit a four-decade high of 11.1 percent in October, prompted by Ukraine’s large-scale invasion of Ukraine, which led to skyrocketing food and energy costs.

Greggs warned back in the summer that the increase in costs is expected to result in a flattening of earnings for the full year, though it has continued to reassure investors that the quality and price of its products gives the company an edge over the food and beverage industry. to-go market.

As Adam Vettese, an analyst at online trading platform eToro, said, “Gregg’s impressive fourth-quarter revenue growth suggests the business model is holding up well despite the worst cost-of-living crisis in a generation.

‘At the same time, the country’s favorite baker is clearly in line with its customer base, with the vegan range continuing to play a greater role in the range.

“Looking ahead, while 2023 will be financially tight for households, Greggs’ focus on value for money and convenience should serve it well.”

Greggs shares were up 0.6 per cent to £24.56 late morning on Thursday, though their value has fallen by more than a quarter in the past 12 months.