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Britain's Greggs Sees Sales Rise Amid Supply Chain Disruptions

British baker and fast food chain Greggs has raised its full-year profit outlook, after underlying third-quarter sales rose 3.5% compared to two years ago despite staffing and supply chain disruption.

Greggs, which trades from 2,146 shops and is best known for its sausage rolls, steak bakes, vegan snacks and sweet treats, said sales growth was particularly strong in August when a 'staycation' effect was evident and remained in positive territory in September, with two-year like-for-like growth of 3.0% in the four weeks to 2 October.

However, the group said it had not been immune to pressures on staffing and supply chains, and had seen some disruption to the availability of labour and supply of ingredients and products in recent months.

It cautioned that food input inflation pressures were also increasing.

Cost Increase

'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,' it said.

Greggs said its operational cost control has been good and the strong sales performance in the third quarter had given it confidence as it moved into the autumn.

'Subject to any unexpected COVID disruption, we expect the full-year outcome to be ahead of our previous expectations,' it said.

Prior to Tuesday's update analysts' average forecast for full-year pretax profit was £133 million.


In August, the bakery chain reported a return to profit in the first half of its financial year, and said it expects annual profit to be slightly ahead of its previous expectations.

Analyst Viewpoint

Commenting on the company's trading update, Josh Holmes of Retail Economics said, “The return of commuters and a boost in retail footfall supported robust demand during a challenging period for the retailer.

"The impact of the pandemic has also accelerated a more digital-focused customer journey towards the much-loved sausage roll. Greggs' multichannel approach appears to be a success as digital platforms offer near-frictionless and speedy delivery options for loyal customers.

"However, a key takeaway from these results is that even Greggs, a success story of the high street, is not immune to the supply chain disruption and labour shortages that threaten to derail the high street’s recovery. There are some significant challenges ahead with the rising cost of ingredients and staff shortages likely to be of significant concern in the lead-up to the crucial festive period.”

News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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