Greggs reports solid Q3 trading results

In the 13 weeks to 30 September 2017, Greggs has reported that total sales grew by 8.6% (2016: 5.6%) and like-for-like sales in company-managed shops increased by 5% (2016: 2.8%).

Total sales for the bakery chain have grown by 7.8% in the year-to-date and like-for-like sales have increased by 3.9%.

The investment in the group's new forecasting and replenishment system is resulting in greater product availability for customers; in addition, the seasonal changes to its range has been popular and it has further developed its Balanced Choice options. Sales at breakfast time continue to grow strongly along with participation in the brand's great value deals.

In the year-to-date, Greggs has opened 98 new shops, including 37 franchised units predominantly in transport locations. We have closed 32 shops, giving a total of 1,830 shops trading at 30 September (comprising 1,636 of our own shops and 194 franchised units).

For the year as a whole, the firm still expects to open 140-150 shops and close 40-50, a net increase of around 100. It has also completed 120 shop refurbishments and remains on track to refurbish around 130 shops this year.

As the group goes into the final quarter of the year, it has launched its autumn/winter menu including a new ‘all day breakfast’ wrap and added Thai Chicken Soup to our Balanced Choice range.

Work on its supply chain investment plan is progressing with the focus on redeveloping our Leeds bakery to consolidate manufacturing of small cakes and muffins. Alongside this, Greggs will trial its new SAP supply chain system in two sites ahead of broader deployment next year.

Greggs investment in greater product availability and service has benefitted recent trading. As the firm has previously indicated, food ingredient cost pressures are a headwind, although it continues to expect that the rate of increase will begin to ease towards the end of the year.