REG - Greggs PLC - Trading Update

GreggsAnnouncement

16/05/2023 07:00

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RNS Number : 4717Z  Greggs PLC  16 May 2023

 

16 May 2023

 

GREGGS plc

TRADING UPDATE

 

Continued strong trading performance

 

Highlights for the first 19 weeks of 2023

 

·    17.1% LFL* sales growth, in part reflecting the impact of Omicron in
early 2022

·    63 new shops opened, 26 closures; strong pipeline of new shop and
relocation opportunities

·    Continued progress with sales growth initiatives

·    No change in cost inflation expectations

·    Commenced projects to invest in additional logistics capacity

·    Board's expectations for the full year outcome unchanged

 

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

 

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%, 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% 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 £609 million (2022: £495
million).

 

Shop estate and supply chain development

 

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.

 

 

 

 

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

 Richard Hutton, Chief Financial Officer   Sophie Miles / Emily Brooker

 David Watson, Investor Relations          Tel:      020 7796 4133

 Tel:      0191 281 7721                   Email: greggs@hudsonsandler.com

 

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