Greggs PLC: Announces Q1-2023 Trading Update

Newcastle upon Tyne / UK. (gs) British Greggs PLC, the leading bakery food-on-the-go retailer in the United Kingdom with more than 2,300 retail outlets throughout the country, announced its trading update for the first 19 weeks to 13 May 2023. Highlights:

Trading performance

Greggs performed strongly in the first 19 weeks of 2023 as we progressed our strategic growth plan against a challenging macroeconomic backdrop. Like-for-like (LFL) sales in company-managed shops grew by 17.1 percent, in part reflecting the impact of Omicron in the first nine weeks of 2022. LFL sales growth in the ten weeks to 13 May has averaged 15.7 percent and we expect this figure to continue to normalise as we annualise against the actions taken in 2022 to mitigate against inflation.

Menu development continues to support our strategic growth objectives. Sales of hot food and snacks including chicken goujons and wedges are showing particularly strong growth. Pizza is also proving popular, with our Late Trade Pizza Deal driving sales in the evening daypart. We have also continued to grow our plant-based offering, with the new Vegan Mexican Chicken-Free Bake being the latest addition to the menu and were delighted that our Sweet Potato Bhaji and Rice salad bowl recently won the Healthy Eating award at The Sammies 2023.

Total sales in the 19 weeks to 13 May 2023 were GBP 609 million (2022: GBP 495 million).

Editorial note: The inflation rate for the United Kingdom in January 2023 was around 10.1 percent year-on-year (y-o-y). In February 2023, it was approximately 10.4 percent compared y-o-y. In March 2023, it was 10.1 percent y-o-y. In all nominal sales figures – without volume data – current inflation rates must be taken into account under these circumstances in order to arrive at approximate real sales figures. However, Greggs PLC’s robust results are well above the rate of inflation. In short, the strategy pursued resulted in outstanding growth even in difficult economic times (end of note).

Shop estate

During the period we opened 63 new shops, including 25 with our franchise partners. Recent shop openings have included sites at Canary Wharf Station and at Glasgow and Cardiff airports. The pipeline for the remainder of the year is strong. In the year to date we have closed 26 shops, giving a total of 2,365 shops trading at 14 May (comprising 1,908 company-managed shops and 457 franchised units).

In line with our previously-communicated capital expenditure plans, investment projects at our Birmingham and Amesbury distribution centres are under way and will deliver additional logistics capacity to support further expansion of our shop estate. We anticipate that this additional capacity will become available in the second half of 2024.

Outlook

We have made a good start to the year with sales in line with plans and continued progress on our strategic initiatives. Looking ahead, whilst we expect the macro backdrop to continue to be challenging, we are confident in making further progress.

Although we expect to see ongoing material cost inflation, we have good forward cover on key commodities. Consumer disposable incomes are likely to stay under pressure, but we remain confident that our outstanding value proposition continues to be compelling.

Whilst uncertainties continue, the Board’s expectations for the full year outcome are unchanged.