Chicken goujons and late nights give Greggs another positive quarter
British bakery and fast food chain Greggs said it saw strong sales growth in the first 19 weeks of 2023, as it continued the roll-out of new shops, longer trading hours and added extra options to its menu.
Greggs said that total sales in the 19 weeks to 13 May 2023 were £609m, up from £495m on the previous year, despite a “challenging” macroeconomic climate.
“Menu development” was a key factor in its growth, according to the fast food chain, with sales of hot food and snacks such as chicken goujons, wedges and pizza proving popular with customers.
It also recently announced a growth in its plant-based offerings with a new vegan mexican bake the latest addition to the menu.
The firm’s share price is up a third over the past twelve months.
It comes as the sausage roll seller announced in March that it would boost its UK sites to 3,000, on top of an earlier decision to keep shops open later, with many now trading past the traditional shutting time of 6pm.
During the current period Greggs opened 63 new shops, including 25 with our franchise partners as sites including Canary Wharf Station and Cardiff airports.
The chain said that the “pipeline for the remainder of the year is strong,” with a total of 2,365 shops currently open as of 14 May.
It added: “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.”
Punters are ‘loving’ Greggs’ innovation
Market analysts praised Greggs for innovating – and for closing 26 outlets in the first 19 weeks of 2023, to ensure the focus remained on the most profitable stores.
Russell Pointon, Director at Edison Group said “Greggs’ value proposition, combined with the introduction of innovative new products like chicken goujons and the Vegan Mexican Chicken-Free Bake, continues to resonate with consumers.”
Meanwhile, Russ Mould, investment director at AJ Bell, commented that “while it will forever be associated with the sausage roll, Greggs continues to see menu innovation and the punters are loving it.”
“The company seems to be onto a winner with a broader range of hot food such as chicken goujons, wedges and pizza helping to draw in customers for longer hours in the day, including evening times which is a key component of why it set a goal a year ago to double sales within five years.
He added though “as with any business of this scale, there is a big focus on efficiency and not putting up with underperforming components. Despite ongoing expansion, 26 shops were closed in the first 19 weeks of 2023, following 39 closures in 2022. Shop closures would normally be cause for alarm, however many large retailers in recent years have taken the view it is better to focus on the best stores than simply go for a scattergun, land-grab approach.”
The board said that its expectations for the full year outcome are unchanged.
Last month, it was reported that Greggs was gearing up for court action with Westminster Council after it was prohibited from serving its baked goods 24hrs a day in Leicester square, as police feared it could cause antisocial behaviour.