Greggs: UK bakery chain celebrates strong start to the year with increase in sales and 160 more stores to open

The bakery chain Greggs is celebrating a strong start to the year, with sales soaring as its expansion across British high streets continues. During the first 19 weeks of 2024, the company saw an 7.4% increase in like-for-like sales.

Greggs added that its new range of iced drinks was “performing well”, with plans to roll it out further from 300 shops now to up to 700 in the coming months. The new range includes coffee, flavoured lemonades and coolers.

The group said it remains on track for full-year expectations after the first quarter trading and said that it continues to forecast a 4% to 5% rise in its own costs over the year. Greggs said: “We have made a good start to the year with continued like-for-like growth in a challenging market, reflecting the strength of our strategic plan.”

Chief executive Roisin Currie said staff costs remained the primary driver of inflation in the business. He said: “The majority of cost inflation pressures that we face this year is wages. We put through a wage increase at the start of January.” On price increases, Ms Currie said the firm will “continue to keep that under review, making sure that we offer great value to customers.”

It comes after figures from the Office for National Statistics revealed on Tuesday morning that regular average wage growth across the UK remained unchanged at 6% in the three months to March. The update comes after Greggs recently became the latest UK retailer to suffer a systems outage.

A raft of its stores were forced to close during one morning last month after technical issues left it unable to accept payments. The problem affected shops nationwide, including in London, Sheffield and Birmingham, but it was resolved later in the same day.

In its latest update, Greggs said it was “building capacity for further growth in the UK” as is confident of opening up to another 160 shops on a net basis over the full year.

The firm said demand for pizza boxes has been strong in the recent 19 weeks following a dedicated campaign, while hot food favourites include its southern fried chicken goujons and southern fried potato wedges. The group has also been expanding its healthier food ranges, recently launching a vegetarian pesto and mozzarella pasta dish, as well as feta and tomato pasta.

Bristol-based investment service Wealth Club said the bakery’s brand contributed to its financial performance despite economic uncertainties. Charlie Huggins, manager of the Quality Shares Portfolio said: “Greggs has made a solid start to 2024. Like-for-like sales are growing nicely and with no change to cost inflation expectations, the group has reiterated its full year guidance.

“Greggs' brand continues to resonate strongly with the UK consumer, despite the weak economic backdrop.  The roll out of new stores, extended opening hours and new menu items like pizza and pasta should all help to sustain this momentum. That said, Greggs' shares are not as cheap as its pasties. This means it will need to maintain strong progress in order to keep investors happy."