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Gloucestershire Business News

Strong sales performance for Greggs

Food-to-go retailer, Greggs, saw a big rise in sales for the first half of the year.

Total sales were up 27.1 per cent to £694.5 million, while like-for-like sales grew by 22.4 per cent in the 26 weeks to July 2, as cash strapped customers opted for cheaper lunches.

But the chain, which has branches in Gloucester, Cheltenham, Stroud, Cirencester and Lydney, predicts pre-tax profit of £55.8 million, broadly in-line with last year, due to higher levels of cost inflation.

Greggs opened 70 new stores and closed 12 during the same period and is on track for 150 net new shop openings in 2022.

Roisin Currie, chief executive, said: "Greggs delivered an encouraging performance in the first half of the year, with sales ahead of 2019 levels. These results demonstrate the continued strength of the Greggs brand.

"During the period we continued to make good progress with our strategic priorities, including expanding our shop estate and making Greggs more accessible to customers through extended trading hours and digital channels.

"We are well positioned to navigate the widely publicised challenges affecting the economy and continue to have a number of exciting growth opportunities ahead, with a clear strategy for expansion. We remain confident in Greggs' ability to deliver continued success."

Charlie Huggins, head of equities at Wealth Club, said: "Greggs has managed the pandemic well and sales have recovered strongly. However, just as one major threat recedes, another rears its ugly head - this time inflation.

"The cost of raw materials, energy and wages are all rising rapidly. Greggs is significantly exposed to all three, putting pressure on profits. There's a limit to how far it can raise prices to offset these extra costs. Greggs also has a reputation for offering exceptional value for money, which it's keen to uphold.

"So far, Greggs is managing these pressures well. While costs have grown, so too have revenues. Gregg's brand reaches more people today than before the pandemic. Greggs has transformed its supply chain, while growing its product range and store estate

"If Greggs can maintain its recent sales momentum, it will go some way to offsetting inflationary pressures. But until inflation comes down, Greggs will have to run hard just to stand still."

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