Greggs sales growth slows despite extended trading hours

Shares in Greggs fell on Tuesday after the group posted slower sales growth, despite a boost from new products and longer opening hours.

The bakery chain said revenue rose 10.6 per cent in the 13 weeks ending September 28, meaning its total turnover has risen 12.7 per cent since the start of the year.

But comparable sales at company-run stores rose 5 percent in the third quarter, about two-thirds less than the 14.2 percent growth rate recorded during the same period last year.

Business peaked in September, just after the launch of its fall menu, which includes traditional customer favorites like salted caramel lattes and new items like the pumpkin spice donut and baguette for breakfast that lasts all day.

Greggs said its new range of iced drinks is currently available in 800 stores, but is planned to be at 1,000 by the end of 2024.

It also attributed the growth to “further advancements in expanded trading hours and digital channels.”

The Newcastle-based company has been gradually increasing the number of stores that stay open late into the night.

This has gone hand in hand with an increase in its retail park, which now totals 2,559 after the opening of 86 net new establishments so far this year.

Greggs still expects to open between 140 and 160 stores in 2024 and for cost inflation to be at the lower end of its 4 to 5 percent guidance range.

He told investors: ‘While recognizing the current economic uncertainty, the board expects the full year result to be in line with its previous expectations.

“The board remains confident in the long-term growth opportunity for Greggs and we are investing to support that growth.”

Earlier this summer, Greggs raised prices on some popular items, such as its vegan cheese sandwiches and sausage rolls, partly due to pressures from rising wages.

Britain’s national living wage rose by around 10 per cent to £11.44 from April for people aged 21 and over, while the national minimum wage for young people and apprentices expanded by between 12 and 21 per cent. .

Mark Crouch, market analyst at eToro, said: ‘Even as consumers save money and look to alleviate the pressures of rising food prices, Greggs has excelled in what remains a challenging environment.

“Cooling inflation has certainly helped drive the impressive performance, so while interest rates are forecast to fall further next year, investor appetite for Greggs is likely to grow.”

greggs stock They were down 3.1 per cent to £30.28 on Tuesday morning, but are still up around 15 per cent this year.