High street baker Greggs today revealed strong third quarter results as it achieved growth ahead of expectations.
In the 13 weeks ending on 3 October, like-for-like sales at Greggs shops grew by 4.9%, making like-for-like sales for the year to date 5.6%. Total sales in the period grew by 5%, bringing the year’s increase to 5.1%
At the same time, Greggs shied away from discussing how it would react to the spectre of the upcoming National Living Wage, which will come into effect in April 2016. The retailer’s trading update said “increases to wage rates will drive greater inflationary pressure.” It also noted that the “standard rate for hourly-paid shop staff is already above the National Minimum Wage”, and that the company plans to retain a “competitive position in the market going forward.”
During the third quarter Greggs revamped 158 shops, on track with its plans to complete 200 by the end of the year. In addition, 20 larger bakery cafes were converted to the ‘bakery food-on-the-go’ format.
The total Greggs estate increased to 1,668 with the opening of 65 new shops on 6 October, though 47 were closed. Meanwhile, the relationship with Euro Garages is allowing Greggs to offer its products to “previously inaccessible locations, particularly transport sites.” So far, Greggs outlets have been set up in 30 of Euro Garages’ forecourt sites, with plans to extend this by a further 27 in sites that are currently undergoing refurbishment.
In order to improve its distribution network, Greggs also acquired a new freehold distribution depot adjacent to the existing bakery in Enfield, which it expects to come into use during the second half of 2016.