Greggs, the well-known low-price sausage roll seller, has reported a significant increase in sales, exceeding 20% growth over the past three months. The company attributes this success to its unwavering commitment to providing exceptional value to its customers, allowing it to solidify its market share and capitalize on the prevailing cost-of-living crisis in the U.K.
In August alone, consumer prices in the U.K. rose by a staggering 6.7% year-over-year, with food prices increasing at an even higher rate. Against this backdrop, Greggs' competitive pricing strategy and offerings have resonated strongly with cost-conscious consumers.
During the 13-week period ending on September 30, Greggs witnessed a noteworthy upsurge of 20.8% in sales. This growth can be attributed to increased demand during evening hours and a surge in sales facilitated through its mobile application. The company also recorded an impressive rise of 14% in comparable-store sales managed by the company.
The decision to extend opening hours until 8 p.m. or later across 500 of its shops earlier this year proved to be a shrewd move for Greggs. This move resulted in an 8.8% increase in evening sales, further bolstering their revenue streams during these crucial hours.
Alex Smith, an analyst at Third Bridge, commended Greggs' strategic decision to extend its opening hours, crediting it as an effective tactic for generating additional revenue.
With such robust sales figures, Greggs is now poised to expand further, aiming to open a record number of new stores in 2023. This year alone, the company has successfully launched 144 stores and closed down 62 outlets. As a result, it currently boasts a total of 2,410 outlets—a testament to its unrivaled market presence as the largest bakery chain in the U.K.
Greggs' continued success reaffirms its commitment to providing exceptional value to customers amid challenging economic conditions. As they look towards future growth, the company remains dedicated to delivering quality products at affordable prices, delighting consumers across the nation.
Greggs to Expand with New Manufacturing Facility
The renowned pastry firm, Greggs, is set to expand its operations with the opening of a new manufacturing facility in Balliol Park, Newcastle upon Tyne. This location holds significance as it is close to where the very first Greggs shop opened its doors in 1951.
Industry analysts believe that the recent easing of inflation could further boost Greggs' growth by alleviating cost pressures and increasing customer demand.
Charlie Huggins, an analyst from Wealth Club, has noted that the cost of raw materials, energy, and wages has risen rapidly in the past year. However, these cost pressures are starting to ease, which is encouraging news for both profit margins and consumer demand. This reduction in costs will potentially eliminate the need for price increases.
Huggins emphasized that Greggs can continue to perform well even if inflation eases. However, the reason behind the decrease in inflation matters. If it is due to a significant weakening of the economy and job security concerns, then Greggs' sales might be negatively affected. This aspect will be vital to monitor in 2024.
According to Smith from Third Bridge, implementing automation solutions in both the kitchen and at the counter could further enhance Greggs' profits in response to rising wages.
While Greggs' shares experienced a 3% decline in trading on Tuesday, they have seen a remarkable 39% increase over the previous year. Despite this slight dip, the company maintains its expectation of full-year results aligning with previous estimates.
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