Greggs’ turnover rises by £150 million after a late-close boost

Greggs’ turnover grew by around £150 million on an annual basis in the first half as the bakery chain was boosted by later closing times.

Group sales rose 21.5 per cent to £844m for the six months ended July 1, with underlying revenue at company-operated stores up 16 per cent.

A growing share of retail trade came from customers purchasing food after 4 p.m., following the expansion of hours for hundreds of stores.

Pizza remained especially popular with end-of-day shoppers, while the Mexican chicken and vegan tandoori chicken-free flatbreads also sold well.

Like-for-like revenue increased further on solid demand in the first two months of the period, which was hit last year by the reintroduction of Covid-related travel restrictions.

Thanks to the huge sales, the Newcastle-based company’s underlying profit before tax rose 14.2 per cent to £63.7m, despite significant inflationary pressures and consumer tightness.

Roisin Currie, CEO of Greggs, said: “As consumers continue to be under pressure, we continue to provide exceptional value, which is reflected in our performance and growing market share.”

Greggs expects cost inflation to improve to 7 percent in the second half, compared to 11 percent in the previous six months.

Charlie Huggins, head of equities at the Wealth Club, complements Greggs with “another solid performance…in a challenging economic environment, with little sign to date of consumers cutting back on sausage rolls and pasties.

“Greggs benefits from doing the simple things well. It has a brand that resonates with consumers, and it’s growing that with wise investments in stores, new ranges, supply chain and infrastructure.”

For the full year, Greggs expects to expand the store base by approximately 150 stores, in line with the goal of having more than 3,000 stores by the end of 2027.

The FTSE 250 group is looking to expand its reach into traditionally underserved locations, including supermarkets such as Tesco and Sainsbury’s, retail parks and travel hubs.

In recent months, new outlets have opened at Glasgow Airport, London Gatwick’s South Terminal and Canary Wharf tube station.

In addition, the bakery chain is testing 24-hour drive-thrus and improving its supply chain by investing in its distribution centers in Birmingham and Amesbury.

Greggs shares were 5.9 per cent lower on Tuesday morning at £25.98, but have still grown by around 30 per cent over the past 12 months.