Hungry shoppers gave Greggs its best Christmas ever with holiday sales up more than eight per cent. Along with its best-selling steak and cheese roll, its coffee sales alone totalled more than £1 million. Now Britain’s biggest bakery chain is set to expand its presence, with outlets on retail and office parks high on the menu.
Reporting strong trading during the three weeks to 3 January — and following a year-long refocus of its operations toward “food-on-the-go” — the bakers confirmed 2015 would be a year of “net store network growth”.
Greggs opened 50 new stores and closed 70 during 2014, but its boss Roger Whiteside claimed the food chain was now in a position to support at least another 350 stores across Britain. It already has 1,600 outlets.
The chief executive said his chain’s venture into new store locations — such as concessions in Spar stores and a takeaway on the Isle of Wight ferry — had proven successful but, he added: “We have no plans on the horizon to make acquisitions. Our aim is to expand Greggs’ presence across retail and office parks, as well as travel locations.”
Whiteside explained: “There is still a lot of opportunity for Greggs, particularly in these high-footfall locations where people are shopping and working. There is still some room for high street openings, perhaps in the South East and South West, but for the most part we’re looking at these new locations.
“I expect most new stores in 2015 to be our own stores, but there are some locations such as motorway services where you need franchise partners to access the market.”
Last year’s financial figures benefited from the extra trading week — there were 53 weeks ending on 3 January — pushing up total sales by 5.5 per cent. It allowed the firm to start the new year with a “tail wind” and with Whiteside expecting March’s full year results to surpass expectations.
The executive said he welcomed falling petrol prices for giving consumers more spending power and highlighted low commodity prices for their part in protecting margins. It is a view shared by the majority of market watchers.
Fiona Cincotta is a senior analyst at online financial spread betting firm Finspreads and has tracked the baker’s rise closely. “Market forecasts are predicting pre-tax profits of around £53.6m compared to £41.3m the year before,” she said.
“Since December, that market forecast has risen to £58.96m … And the fact that Greggs repeated that it would beat all expectations suggests profit forecasts are still too low.”
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