Greggs has delivered increased sales while controlling costs in the 13 weeks to 3 October 2015. Like-for-like sales in its own shops grew by 4.9% against strong comparatives, slightly ahead of expectations.
In the year to date like-for-like sales have increased by 5.6% and total sales grew by 5.0% in the 13 weeks and have grown by 5.1%in the year to date.
Greggs has achieved 158 shop refurbishments and are on track to complete around 200 shops this year. In addition, it has now converted 20 of its larger bakery cafes to the 'bakery food-on-the-go' format.
The group opened 65 new shops in 2015, including 35 franchised units predominantly in transport locations. It has closed 47 shops, giving a total of 1,668 shops trading at 6 October (comprising 1,588 of its own shops and 80 franchised units).
The work with franchise partners is extending the Greggs offer to previously inaccessible locations, particularly transport sites. The firm's relationship with Euro Garages has so far led to the development of Greggs outlets in 30 of its forecourt sites.
Greggs has now agreed to extend this to a further 27 sites that are undergoing refurbishment in the fourth quarter. As a result we now expect shop numbers for the full year to increase by a net 50-60 overall.
The company has recently acquired a freehold distribution depot adjacent to its existing bakery in Enfield. The total investment, including conversion works, is likely to be around £13m and the firm expects that the facility will be brought into use in the second half of 2016.
Product initiatives across the day combined with the brand's value deals continue to drive increased customer visits and transaction values.
The extension of the Balanced Choice range to include improved own-label drinks with no added sugar has proved popular with customers.
With colder weather approaching Greggs has relaunched its hot food menu with a range of soups and hot sandwiches. New additions to the menu include the Mildly Spiced Chicken Curry Soup and Peri Peri Chicken Flatbread, both of which are part of the Balanced Choice range. Other additions to the hot menu include the Aberdeen Angus Spicy Meatball Melt Baguette.
The seasonal range for Halloween is back in shops, including the popular Bat Biscuit
and Spooky Ring Bun.
Market conditions remain favourable with low cost pressures and a stronger consumer environment. Greggs expects this to continue through to the end of the year after which increases to wage rates will drive greater inflationary pressure. Greggs' standard rate for hourly-paid shop staff is already above the National Minimum Wage and it will maintain a competitive position in the market going forward.
Sales performance is slightly ahead of the previous plan and, whilst comparatives will stiffen further in the fourth quarter, sales will benefit from additional shop openings. As a result Greggs expects to deliver good growth for the year, slightly ahead of our previous expectations, and further progress against the strategic plan