Strong sales for baker Greggs

Sales growth was slower than the 5.2% rate a year earlier but the baker said it was slightly better than its own forecast.

Greggs has completed 158 refurbishments so far this year and is on course to complete 200 shops by the end of the year.

“In addition we have now converted 20 of our larger bakery cafés to the “bakery food-on-the-go” format”.

Greggs – which opened 65 new shops during 2015 alone – has hinted it will raise wages beyond that, though.

Greggs said its healthier “Balanced Choice” range, which recently introduced drinks with no added sugar, was proving popular with customers, although it did not give sales figures.

“With the winter months approaching, it has also relaunched its hot menu to include a few traditional products with a higher quality touch such as an Aberdeen Angus spicy meatball melt baguette”, Scott said. We have closed 47 shops, giving a total of 1,668 shops trading at 6 October (comprising 1,588 of our own shops and 80 franchised units).

“We believe the instore initiatives, product innovation, refit programme and cost saving initiatives will provide ongoing momentum to the Greggs story and we reiterate our “buy” stance”, said Shore Capital analyst Darren Shirley.

The group added that work with franchise partners is extending the Greggs offer to previously inaccessible locations, particularly transport sites. The depot was expected to start operations in second half of 2016.

Chief executive Roger Whiteside said markets were still positive with low costs and a stronger consumer environment.

The baker current pays its staff a standard rate of £7.11 an hour – 41p higher than the current minimum wage.

“Our sales performance is slightly ahead of our previous plan and, whilst comparatives will stiffen further in the fourth quarter, sales will benefit from additional shop openings”.

“As a result we expect to deliver good growth for the year, slightly ahead of our previous expectations”.