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Greggs sees total sales rise by 7.5%

Greggs, the leading bakery food-on-the-go retailer in the UK with 1,800 retail outlets, has reported total sales rose by 7.5% in first 19 weeks of 2017 (2016: 5.7%). Company-managed shop like-for-like sales were up 3.6% (2016: 3.7%).

Greggs said that customers increasingly recognised the quality and value of the brand's £2 breakfast offer and it has invested further in capacity to meet this growing demand.

Balanced Choice sales continue to grow and Greggs has added lines to this range, including cold-pressed juice drinks and a new selection of freshly-prepared salads and wraps incorporating flavours such as Coconut, Lime and Chilli Chicken.

Greggs completed 87 shop refurbishments and opened 42 new shops, including 20 franchised units in transport locations. The firm closed 14 shops, giving a total of 1,792 shops trading at 13 May (comprising 1,615 company-managed shops and 177 franchised units).

New shop openings remain focused on new food-on-the-go locations, the relocation of existing shops and new catchments such as Northern Ireland and the south west of England.

Central forecasting and replenishment is now operating in half of its shop estate, replacing the traditional ordering process. Initial signs are good - the system is popular with staff and is delivering improved product availability.

The company also concluded the consultation process with staff affected by the planned consolidation of its manufacturing operations and now have a basis on which to commence the investment programme that will support further growth in shop numbers and improved quality and efficiency in manufacturing.

Greggs stated, 'We have made a good start to 2017 although the sales outlook remains uncertain in the context of slowing growth in disposable incomes. Input cost inflation is having a modest impact on margins in the first half of the year as expected, however we have increasing visibility of costs for the second half and anticipate this pressure to ease towards the end of the year. Whilst this pattern will constrain profit growth in the first half of the year we expect to make progress in line with our previous expectations for the year as a whole.'