14 May 2024
GREGGS PLC
("Greggs" or the
"Company")
TRADING
UPDATE
Continued strategic and
operational progress; building capacity for further growth in the
UK
Highlights for the first
19 weeks of 2024
·
7.4% LFL* sales growth, with continued good
progress across all channels
·
64 gross new shops opened, 27 net openings, 2,500
shops now trading
·
Remain confident in 140-160 net shop openings for
the full year
·
No change in cost inflation expectations; 4-5% on
a LFL basis
·
Investments to increase supply chain capacity
progressing well
·
Board's expectations for the full year outcome
remain unchanged
* Like-for-like (LFL) company-managed
shop sales performance against comparable period in 2023
Trading performance
Greggs performed well in the first
19 weeks of 2024 as we progressed our strategic growth plan.
Like-for-like (LFL) sales in company-managed shops grew by 7.4%,
with delivery sales, evening trade and increased participation in
the Greggs App all supporting transaction volume growth. Total
sales in the 19 weeks to 11 May 2024 were £693 million (2023: £609
million).
Our new over-ice drinks range
including coffee, flavoured lemonades and coolers, currently
available in 300 shops, is performing well and will be rolled out
to up to 700 shops in the coming months. Pizza boxes have
been in strong growth following a dedicated campaign and hot food
continues to perform well, with our Southern Fried Chicken Goujons
and Southern Fried Potato Wedges proving popular with customers. We
also continue to extend our range of healthier choices, introducing
the vegetarian Pesto and Mozzarella Pasta and Feta and Tomato
Pasta, alongside our award-winning vegan Sweet Potato Bhaji and
Rice salad bowl.
Shop estate and supply chain development
During the period we opened 64 new
shops, including 15 with our franchise partners. Recent shop
openings have included sites at Embankment underground station,
four shops with Tesco and three with Sainsbury's, the latter
including two petrol filling station locations. In the year to date
we have closed 37 shops (including 23 relocations), giving a total
of 2,500 shops trading at 12 May (comprising 1,986 company-managed
shops and 514 franchised units). The pipeline for the
remainder of the year is strong, including a number of further
opportunities with supermarket groups, and we remain confident in achieving 140-160 net openings for the
full year.
In line with our
previously-communicated capital expenditure plans the investment
projects at our Birmingham and Amesbury distribution centres are
progressing well and will deliver additional logistics capacity by
the end of 2024. The fourth production line for our iconic savoury
rolls and bakes at Balliol Park in Newcastle has now been
commissioned, as planned, and will increase production capacity at
the site by 35% over time.
In order to support the longer-term
growth potential of the business we are, as previously
communicated, progressing with the development of two new sites in
the Midlands which are expected to be operational in late 2026 /
early 2027:
- We have entered into
an agreement for lease on a site at SmartParc SEGRO Derby for a
facility that will be the focus of our increased manufacturing
capacity needs whilst also supporting expansion of our logistics
network capacity. The landlord is currently constructing the
building, following which we will develop and install the first
phase of manufacturing and logistics equipment through 2025 and
2026. In addition to the self-funded capital expenditure to install
the equipment a leased right-of-use asset of circa £65 million will
also be recognised on the commencement of the lease.
- We are progressing
negotiations on the purchase of land in the Corby/Kettering area,
where we will develop a National Distribution Centre for chilled
and ambient goods. This site will significantly extend our
logistics capacity across the network to circa 3,500 shops and
deliver efficiencies through semi-automated storage and picking
solutions. We aim to exchange contracts on the purchase of the land
in the coming months.
Outlook
We have made a good start to the
year with continued like-for-like growth in a challenging market,
reflecting the strength of our strategic plan.
There has been no change to the
outlook for cost inflation, which we expect to be in the range of
4-5% on a LFL basis.
Whilst early in the financial year,
the Board's expectations for the full year outcome are
unchanged.
ENQUIRIES:
|
|
Greggs plc
|
Hudson Sandler
|
Roisin Currie, Chief
Executive
Richard Hutton, Chief Financial
Officer
David Watson, Investor
Relations
Tel:
0191 281 7721
|
Wendy Baker / Hattie Dreyfus /
Nick Moore / Emily
Brooker
Tel: 020 7796 4133
Email:
greggs@hudsonsandler.com
|