High street baker Greggs said it was trading ahead of expectations for the year as customers bought more pies and pasties and the group opened more stores.
Sales in the 13 weeks to 3 October at Greggs stores open at least a year rose 4.9%, Greggs said in a trading update. Sales growth was slower than the 5.2% rate a year earlier but the baker said it was slightly better than its own forecast.
The company, whose fans include the actor Jake Gyllenhaal, said changing products through the day plus its value deals had attracted customers in the third quarter of the year. It also said the chain’s improved own-label drinks with no added sugar were proving popular.
Greggs has been refurbishing stores and revamping its products to include healthier options as well as the sausage rolls and other baked goods for which it is best known. It has pushed coffee sales and opened stores early to sell breakfast items such as free-range omelettes and porridge.
Additions to the menu for autumn include chicken curry soup and peri peri chicken flatbread. It has launched products for Halloween such as a bat biscuit and a spooky ring bun.
The Newcastle-based company said: “Market conditions remain favourable with low-cost pressures and a stronger consumer environment. We expect this to continue through to the end of the year after which increases to wage rates will drive greater inflationary pressure.
“We expect to deliver good growth for the year, slightly ahead of our previous expectations, and further progress against our strategic plan.”
The trading update is the latest positive statement from Greggs, whose shares rose 5% to £11.30. The group is exploiting low inflation for its ingredient costs and rising wages improving consumer confidence. The baker increased its full-year profit guidance for the second time in three months in July.
Greggs said it paid its staff more than the current minimum wage of £6.70 an hour for those aged over 21 and that it would stay competitive in the market. The government has announced a new “national living wage” of £7.20 an hour for people aged over 25 from April.
Greggs has opened 65 shops this year, including 35 franchises based mainly in “transport locations” such as petrol station forecourts. It closed 47 shops while refitting 158, giving it 1,668 stores.
Source: https://www.theguardian.com
