British food-to-go retailer Greggs said it expected another year of growth in 2024 after it posted a 13% rise in profit last year, helped by extending its opening hours into the evening and expanding in food delivery.
Greggs reported underlying pretax profit excluding exceptional income of £168 million (€196.4 million) for 2023 on underlying sales which were 13.7% higher.
The company, which is famous for its sausage rolls and sells breakfasts, sandwiches, pizza, bakery products and more, said a five year plan to double sales by 2026 was on track and it continued to target 3,000 outlets.
It said it opened 220 new stores in 2023 bringing its estate to 2,473.
Sales Increase
Greggs said underlying sales at company-managed shops were up 8.2% in the first nine weeks of 2024, and it was confident of delivering another year of 'good progress'.
Analysts expect the company's pretax profit to rise to £185 million (€216.2 million) in 2024, according to an LSEG consensus forecasts.
Throughout the year, Greggs expanded its partnerships with retailers such as Primark, Tesco, and its latest addition, Sainsbury’s. Additionally, it expanded its presence in London, establishing new shops in Canary Wharf, Waterloo railway stations, and Gatwick Airport. The company aims to achieve 140 to 160 net openings in 2024.
'Stepping Up'
“Reflecting on another year of rapid growth, I am so proud of how our teams have risen to the challenge of serving more customers through more channels," commented Roisin Currie, chief executive. "Whether in our shops, our manufacturing sites, our distribution network, or in Greggs House, our teams stepped up to make sure that we kept pace with the increased customer demand as we delivered on our strategic growth plan.
“We are very much on track to deliver our bold five-year growth plan to double sales by 2026 and to have significantly more than 3,000 shops in the UK over the longer term.”
Analyst Comment
“It’s hard to think of another British company which remains a core name on the high street and which is still growing as much as Greggs," commented Russ Mould, investment director at AJ Bell. "The brand is now iconic and its sausage rolls legendary.
“The success has enabled Greggs to give something back through different means, including breakfast clubs for school children, outlet stores where people can buy unsold items at a discount to avoid them going to waste, and investors continue to scoop up cash in the form of dividends.
“If you had to pick holes in its latest results, it’s that the 8.2% like-for-like sales growth in the first nine weeks of 2024 is less than the 9.4% growth achieved in the fourth quarter of 2023. The pace of growth actually slowed each quarter during the past year, albeit still delivering the kind of success most companies can only dream of.
“February was a washout month for all retailers due to the bad weather and that might explain the reduced growth reported by Greggs. It certainly doesn’t suggest something has gone wrong with the business.”
Additional reporting by ESM
