Greggs stuck to forecasts for profit to rise 10% this year, as British consumers continued to seek its value baked goods, salads and coffee, and as its evening opening hours and loyalty app help drive sales higher.
As high inflation in Britain squeezes disposable incomes, the bakery chain said it was gaining market share with its focus on affordable food and the launch of new ranges, including its sweet Chilli Chicken Noodle Salad and its Mexican chicken-free bake.
Pretax Profit
Underlying sales rose 16% in the 26 weeks ended 1 July, boosting underlying pretax profit excluding exceptional items by 14% to £63.7 million, which Greggs chief executive said reflected its cheaper prices versus competitors.
"When they (customers) are out and about needing food on the go, we would hope that they would come and shop with us more often because that's a choice that can save them money," Roisin Currie, CEO said on Tuesday.
Rising costs have hit Greggs, but it expects inflation to moderate during the second half to 7% from 11% in the first, putting the annual rate at 9%.
150 New Shops
Greggs trades from 2,400 stores and will open 150 new shops over the course of this year, including outlets in big supermarkets like Tesco, as well as at airports.
Goodbody analysts said that while the update showed Greggs continued strong performance, "We see little in today’s update to push the stock on from current levels."
Shares in Greggs sank 4% to 2,637 pence in early trading.
Stock Increase
Over the last 12 months, the stock has gained 27%, far outperforming Britain's midcap index .FTMC which is down 5%.
Analysts expect Greggs to report pretax profit of about £163 million this year, according to Refinitiv, up 10% on 2022.
The company lifted its interim dividend by 7% to 16 pence par share.
Read More: Greggs Predicts Further Growth As Britons Seek Value Food Options
News by Reuters, edited by Donna Ahern, Checkout. For more retail stories, click here. Click subscribe to sign up for the Checkout print edition.
