Greggs sales growth slows despite extended trading hours

Greggs shares fell on Tuesday after the group posted slower sales growth, despite a boost from new products and longer opening hours.

The high street bakery chain said revenue increased by 10.6 per cent in the 13 weeks ending 28 September, meaning its total turnover has risen by 12.7 per cent since the year began.

But like-for-like sales at company-managed stores expanded by 5 per cent in the third quarter, about two-thirds down on the 14.2 per cent growth rate recorded during the same time last year.

Trade peaked in September, just after the launch of its autumn menu, which includes traditional customer favourites like the salted caramel lattes and new items like the pumpkin spice doughnut and all-day breakfast baguette.

Greggs said its new over-ice drinks range is currently available in 800 shops but is planned to be in 1,000 by the end of 2024.

It also credited growth to ‘further progress in extended trading hours and digital channels’.

The Newcastle-based company has been gradually increasing the number of its stores staying open till the early evening.

This has gone hand-in-hand with an increase in its store estate, which now totals 2,559 following the launch of 86 net new outlets so far this year.

Greggs still expects to open between 140 and 160 shops in 2024 and for cost inflation to be towards the bottom end of its 4 to 5 per cent guidance range.

It told investors: ‘Whilst acknowledging ongoing economic uncertainty, the board expects the full-year outcome to be in line with its previous expectations.

‘The board remains confident in the long-term growth opportunity for Greggs, and we are investing to support that growth.’

Earlier this summer, Greggs hiked prices on some popular items, such as its cheese sandwiches and vegan sausage rolls, partly due to pressures from higher wage bills.

Britain’s National Living Wage increased by about 10 per cent to £11.44 from April for those aged 21 and over, while the National Minimum Wage for younger people and apprentices expanded by 12 to 21 per cent.

Mark Crouch, a market analyst at eToro, said: ‘Despite penny-pinching consumers seeking to alleviate the pressures of higher food prices, Greggs has excelled in what is still a challenging environment.

‘Cooling inflation has undoubtedly helped drive the impressive performance, and so while interest rates are anticipated to fall further next year, investors’ appetite for Greggs is likely to grow.’ 

Greggs shares were 3.1 per cent lower at £30.28 on Tuesday morning but have still risen by around 15 per cent this year.