REG - Greggs PLC - Q3 Trading Update

GreggsAnnouncement

03/10/2023 07:00

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RNS Number : 4310O  Greggs PLC  03 October 2023

 

 

3 October 2023

 

GREGGS PLC

("Greggs" or the "Company")

 

Q3 TRADING UPDATE

 

Strong trading continues; inflation beginning to ease

 

Q3 highlights

 

·    Total sales up 20.8% for the 13 weeks to 30 September 2023

·    Company-managed shop like-for-like* sales up 14.2% for the 13 weeks
to

30 September 2023

·    82 net new shops opened year-to-date (144 openings less 62 closures)

·    Expect between 135 and 145 net shop openings in 2023 and circa 40
relocations

·    Continued growth in market share driven by strategic initiatives:

o Evening trade represented 8.8% of company-managed shop sales for the

13 weeks to 30 September 2023

o 13.1% of company-managed shop transactions scanned on the Greggs App in the
13 weeks to 30 September 2023

·    Delivery service rolling out with a second delivery partner, Uber
Eats, following successful trial

·    Some easing in cost inflation as expected

·    Full year outcome expected to be in line with our previous
expectations

* Like-for-like (LFL) company-managed shop sales performance against
comparable period in 2022

 

Trading performance

 

Greggs continued to enjoy a strong trading performance over the third quarter
of 2023 with total sales up 20.8% and like-for-like sales in company-managed
shops rising by 14.2% when compared with the same period in 2022.

 

This strong LFL performance, founded on increased customer visits, reflects
ongoing development of evening trading and of our digital channels and loyalty
programme through the Greggs App.  Evening trade (sales post-4pm) represented
8.8% of company-managed shop sales for the 13 weeks to 30 September 2023 (H1
2023: 8.3%) and Greggs App participation continues to grow, with 13.1% of
company-managed shop transactions scanned in the 13 weeks to 30 September 2023
(H1 2023: 10.6%).  Market insight data confirms that Greggs continues to grow
its share of the food-to-go market and has maintained its leadership positions
in customer satisfaction and value-for-money ratings (source: Circana, August
2023).

 

Our autumn menu is now available, featuring the Spicy Chicken and Veg Bhaji
Baguette, served hot.  New vegetarian options include the Cheese and Honey
Mustard Toastie, the Veg Bhaji Flatbread and the Mozzarella and Cheddar Bites,
offering customers a new hot-to-go snacking option.  We've also introduced
the Spicy Veg Pizza, available to customers on Click + Collect and via
delivery.  Additions to the hot drink menu include the return of the popular
Pumpkin Spice Latte and the new Hazelnut Mocha and Hazelnut Hot Chocolate.

 

Shop estate and supply chain development

 

In the year to date we have opened 144 new shops and closed 62 shops, giving a
total of 2,410 shops trading at 30 September 2023 (comprising 1,928
company-managed shops and 482 franchised units).  We expect 2023 to be a
record year for the absolute number of new shops opened as we expand into new
locations and relocate shops to better premises within existing catchments.
For the year as a whole, and taking into account relocations and closures, we
now expect between 135 and 145 net shop openings and see a strong pipeline
ahead for 2024.  Our shop openings are giving customers more convenient
access to Greggs, whilst our relocation activity increases our capacity in
existing successful catchments.

 

Investment in our supply chain is progressing well, supporting our ambitious
growth plans.  A fourth production line will be commissioned at Balliol Park
in Newcastle upon Tyne in the coming weeks, adding further manufacturing
capacity for our iconic savoury rolls and bakes.  Work is progressing well to
expand the logistics capacity of our Birmingham and Amesbury distribution
centres, both of which are due to come on stream in 2024.

 

Across the business we continue to expect capital expenditure in 2023 to be
around £200 million, supported by our strong balance sheet.

 

Extension of delivery service

 

At our interim results we announced we had initiated a trial with a second
delivery aggregator. We have now concluded these trials to test the
incremental benefit of making Greggs available for delivery on the Uber Eats
platform, alongside our existing partner Just Eat. We have begun an
accelerated roll out on the Uber Eats platform and expect to have around 500
shops live by the end of October 2023, with further expansion to come in 2024.

 

Outlook

 

As we had expected, the rate of cost inflation has eased as we annualise on
the significant commodity-led increases experienced in 2022.  At a time when
customers are looking to make their money go further Greggs continues to offer
exceptional value and grow market share. We have strong product and
promotional plans for the fourth quarter and the extension of our delivery
service will make Greggs accessible to more customers on more occasions.

 

Whilst acknowledging the uncertainty in the economy as a whole and the very
strong comparative performance of the business in the fourth quarter of 2022,
the Board expects the full year outcome to be in line with its previous
expectations.

 

 

 ENQUIRIES:
 Greggs plc                                Hudson Sandler
 Roisin Currie, Chief Executive            Wendy Baker / Nick Moore / Emily Brooker

 Richard Hutton, Chief Financial Officer   Email: greggs@hudsonsandler.com (mailto:greggs@hudsonsandler.com)

 David Watson, Head of IR
 Tel:  0191 281 7721                       Tel:  020 7796 4133

 

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