Bakery chain Greggs has set its sights on an enormous enlargement of its sausage roll and pastry empire, with plans to open 150 new bakeries this yr.
And it would not cease there, regardless of warnings of rising prices.
The corporate stated there’s a “clear alternative for considerably greater than 3,000 UK shops over time”. Greggs, which already trades from greater than 2,300 shops and retailers, needs to open extra branches at airports, practice stations, supermarkets and procuring facilities.
It additionally plans to increase the hours of some retailers and hopes to check shoppers’ urge for food for 24-hour drive-throughs.
Not less than 500 shops are already open till 8 p.m. – 300 shops will likely be prolonged till 9 p.m.
The plans come after Greggs reported a revenue of £148.3m final yr, up 9 per cent.
Roisin Currie, CEO, stated the enlargement would make Greggs “extra accessible to much more clients.”
“Prospects are on the lookout for worth and that is why they arrive to Greggs. Whereas shopper incomes stay below stress, Greggs continues to supply distinctive worth to these on the lookout for nice high quality foods and drinks on the go,” she stated.
The app, which provides customers their tenth product without cost, attracts clients on the lookout for financial savings, she added, whereas prolonged hours additionally enhance gross sales. However she stated income have been restricted by will increase in the price of components, power and labor.
Greggs stated it expects price inflation to be between 9 and 10 % this yr, with larger wages anticipated to be one of many greatest challenges.
Extra of Firm
Russ Mildew, director of funding at AJ Bell, stated: “With the very best will on the earth and even when family budgets are actually squeezed, generally persons are simply too busy to make sandwiches. There’ll at all times be a spot for food-on-the-go areas and Greggs’ choices match completely into the present atmosphere.
“Low-cost, sizzling, filling meals is strictly what persons are on the lookout for and because the firm rolls out new shops, there are an increasing number of retailers the place individuals should buy these merchandise. By introducing a spread of plant-based merchandise, such because the vegan sausage roll, Greggs has demonstrated his capacity to deal with altering attitudes and appetites and win new clients for the model. Later openings for a lot of its shops ought to assist development, as ought to supply and click-and-collect orders.
“There isn’t a scarcity of ambition at Greggs, with plans to go from the present variety of simply over 2,300 to over 3,000 shops. Whereas that is to be applauded, Greggs should be cautious to not let ambition flip into overconfidence. For instance, will the model stay simply as in style as soon as the financial circumstances have improved and other people have more cash of their pocket?”
Victoria scholar Greggs, funding head interactive investorstated: “Greggs reported sturdy gross sales as demand from cell staff for its low-cost choices of sausage rolls, espresso and different drinks and snacks proved resilient towards the backdrop of shopper weak point and sluggish financial development.
“Nonetheless, price inflation of 9 % weighed on working revenue resulting from stress from rising power payments, components and labor prices. The British bakery warned that price inflation will stay a problem within the coming yr.”
