Greggs Reports Robust Half-Year Sales Amid Strategic Expansion and Menu Innovation

Greggs pushes forward with a multi-pronged approach, integrating new retail formats and diversifying its product offerings. Pre-tax profits for the half-year period increased by 20 per cent to £76 million.

Sales at franchised shops, however, registered a more modest 1.3% year-on-year increase, excluding the impact of new store openings. Greggs expects to trial 10 Greggs Express convenience shops with a self-service format, anticipating these locations will become operational by the end of 2024.

This expansion broadens how Greggs reaches its customer base. The company anticipates opening between 100 and 110 new locations on a net basis throughout 2026.

Beyond new shop formats, Greggs' strategic manoeuvres extend to its product lines. It launched its 'bake at home' frozen range in Tesco, expanding its retail footprint.

Roisin Currie, Greggs' Chief Executive, affirmed the company's unwavering focus. She stated, "We remain focused on opening shops in more catchments and introducing convenient ways for customers to pick up Greggs favourites, while broadening and innovating our menu in line with changing tastes and trends."

Overall inflation for the first half of 2024 settled at 2.2 per cent. This figure stands notably lower than the previously anticipated 3 per cent.

Costs for key ingredients such as coffee and cocoa have decreased after experiencing spikes in 2023. This provides some relief to Greggs' operational expenditures.

However, Ms. Currie highlighted ongoing challenges. She noted, "One of the key costs that we’ve got is wages, so that does hit us because that is an inflationary environment."

This wage pressure impacts businesses across the UK. Companies must balance growth with rising labour costs, a persistent economic reality.

Greggs relaunched its salad range in May 2024, adding protein and increasing choice. This reportedly helped boost sales during recent heatwaves and attracted health-conscious consumers.

Ms. Currie stated, "We had also just launched, before the heatwave started to hit, a new range of salads, with some favourites in there but also some new products such as our prawn layered pasta salad and our chicken caesar along with our grains and green salad." She added, "The timing of those was great and they have sold well."

Menu innovation, aligning with consumer food trends, has attracted new customers. This commitment to "keeping it exciting for customers," as Ms. Currie described, drives engagement.

Greggs acknowledges that while health remains important, customers still seek indulgent treats occasionally. This indicates a balanced approach to menu development.

Ms. Currie explained, "But the customer also wants that indulgent treat every so often." She further elaborated, "So we do still see that while health is very important, actually indulgence is also a trend that’s out there – customers want that sweet treat, not every day but when they want to treat themselves."

Greggs has no further price rises planned after its May 2024 increases. The company claims it will work hard to protect the consumer and offer value throughout 2024.

Ms. Currie asserted, "Our prices are in a good place and we will now be working hard to protect the consumer and making sure that we can offer that value throughout the year."

The expansion across the UK continues unabated. Greggs opened 34 new shops on a net basis during the period.

The company has shown greater resilience in 2024. Ms. Currie stated, "We’ve been much more resilient this year than previously because we learned some lessons."

Looking ahead, Ms. Currie cautioned about external factors. She stated, "The volatility of the Middle East and the impact on energy prices probably plays into what may happen towards the back end of 2024 and into 2027."

Greggs expects cost inflation to remain around 2.2% for the rest of 2024. It maintains its commitment to value for consumers despite these pressures.