DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

Baker Greggs Reaping The Benefits From Menu Experimentation: Analysis

By Steve Wynne-Jones
Share this article
Baker Greggs Reaping The Benefits From Menu Experimentation: Analysis

A leading retail analyst has said that UK high-street baker Greggs is reaping the benefits from applying a more diverse range of menu options, after the chain reported like-for-like sales growth of 3.2% during a period dominated by the summer heatwave.

Greggs posted a 7.3% increase in sales in the 13-week period to 29 September, with its company-managed stores seeing a 3.2% increase in like-for-like sales.

Russ Mould, investment director at AJ Bell, commented, “Sausage rolls and pasties are not typically what you hanker after on a warm, sunny day, so for Greggs to achieve like-for-like sales growth of 3.2% through a third-quarter period which encompassed the summer heatwave is impressive.

“It also shows the company’s efforts in branching out from its budget-baker beginnings to new product ranges are bearing some fruit. Strong demand for pizzas and summer drinks was a significant factor behind the robust sales performance," Mould added.

The company said that total sales have grown by 5.9% in the year to date and like-for-like sales have increased by 2.1%.

ADVERTISEMENT

The group posted a 7.4% increase in sales last year, with like-for-like sales up by 3.7%.

Store Expansion

It has opened 93 new stores in the year to date, including 35 franchised outlets, mainly in transport locations, and it has closed 35 stores, leaving it with a total of 1,912 stores trading as of 29 September.

For the full year, it expects to open a net 100 new outlets, some 60% of which are planned to be alongside franchise partners.

Mould said that the group's most recent quarterly performance “should help get the market back on side, after May’s cold-weather-related profit warning.

ADVERTISEMENT

“Notably, despite an iffy performance for the shares in 2018, they have still more than doubled since chief executive Roger Whiteside took the helm in early 2013,” he said.

Sales Patterns

'We were pleased with our trading performance during a period that included a long spell of hot weather, which made sales patterns more difficult to predict,' Greggs wrote in a statement.

'This, and the resulting mix of sales led to a lower-than-normal trading margin in the first part of the quarter, offset by improved trading as we came into September. Overall our expectations for the full year outturn remain unchanged.'

The group added that it is continuing to invest in its supply chain, with the commissioning of new, consolidated manufacturing platforms at its Newcastle, Leeds and Manchester sites.

ADVERTISEMENT

'As part of our strategic investment in systems we will be implementing the human resource and estate management modules of our integrated SAP solution in the months ahead, with payroll due to follow in early 2019,' Greggs wrote.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.