Bakery chain Greggs has reported stronger than expected sales for the July-to-September period as daily deals continued to bring in customers.
Advertisement
The share price of high-street baker Greggs jumped 5% to £11.30 on Tuesday morning (6 October) after the firm upped full-year expectations with shop like-for-like sales in the 13 weeks to 3 October rising 4.9%.
Own-shop like-for-like sales up 4.9%.
So far this year, Greggs has completed 158 shop refurbishments and is on track to hit 200 by the end of 2015.
The bakery and food-to-go retailer also said the new UK National Living Wage will raise its costs, but noted that it already pays staff above the current minimum.
It has opened 65 new shops and closed 47.
“The extension of our “Balanced Choice” range to include improved own-label drinks with no added sugar has proved popular with customers”, Greggs said in a statement. “And we have just launched the hot eating ranges for the autumn, with new flavours of soup and a relaunch of hot sandwiches doing really well”.
Darren Shirley, at Shore Capital, said: “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’. Greggs has now agreed to extend this to a further 27 sites that are undergoing refurbishment in the fourth quarter.
It added to support the growth potential of the business, particularly in the South East of England, the business has acquired a freehold distribution depot adjacent to its existing bakery in Enfield.
Roger Whiteside, chief executive of Greggs, said: “Wage rises will increase inflationary pressure in the business”.
The Newcastle-based company said: “Market conditions remain favourable with low-priced pressures and a stronger consumer environment”.
But the firm said sales performance was slightly ahead of forecast.
Advertisement
‘We expect to deliver good growth for the year, slightly ahead of our previous expectations, and further progress against our strategic plan’.
