Greggs lifts profit expectations following strong sales
Greggs has seen its like-for-like sales climb by 3.5%% on a two-year basis in its third quarter despite suffering disruption to its staffing levels and supply chain.
The food-on-the-go retailer said sales growth was particularly strong in August when it benefited from a ‘staycation’ effect due to the coronavirus pandemic. In addition, the company’s delivery proposition continued to develop well in the period, with 943 shops now involved in supplying customers through the channel.
In the year to date, Greggs has opened 84 new shops and closed 16 to give a total of 2,146 shops trading at 2 October 2021, of which 361 are franchised units. Openings in the third quarter included three drive-thru locations and the retailer’s first shop in London’s Canary Wharf. Greggs is expecting to have around 100 net openings in its full year, of which half will be run with franchise partners. The number of openings will be accelerated to 150 per year from 2022.
Despite inflationary pressures rising towards end of 2021, Greggs expects its full year outcome to be ahead of previous expectations.
In a trading statement, the retailer said: “Greggs has not been immune to the well-publicised pressures on staffing and supply chains and we have seen some disruption to the availability of labour and supply of ingredients and products in recent months. Food input inflation pressures are also increasing; whilst we have short-term protection as a result of our forward buying positions we expect costs to increase towards the end of 2021 and into 2022.
“Operational cost control has been good and the strong sales performance in the third quarter gives us confidence as we move into the autumn. Subject to any unexpected Covid disruption we expect the full year outcome to be ahead of our previous expectations.”