Thousands of Greggs employees will share in £16.6m windfall after the North East bakery business posted record results in a year of further recovery.
The food-on-the-go firm, which has its head office at Quorum Park, Newcastle, will give its 25,000 employees a portion of the profit share sum in this month’s pay packet, having seen total sales rocket by 51% to £1.229bn - also 5.8% above the pre-pandemic sales of £1.16bn.
Pre-tax profit for the year was £145.6m - a return from Greggs’ only loss recorded in 2020 of £13.7m and up on 2019’s £108.3m profit.
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Like-for-like sales were 3.3% lower than the equivalent period in 2019, but sales growth has returned following the lifting of restrictions, with CEO Roger Whiteside hailing the firm and its staff, saying: “We’ve coped with everything that Covid had to throw at us and come back stronger, which is what we wanted to do.”
He said Greggs had started 2022 well, helped by the easing of restrictions, although cost pressures are currently “more significant than initial expectations” and that “given this dynamic we do not currently expect material profit progression in the year ahead”, adding that flat profit would be an achievement under these circumstances.
At the start of the year the firm moved prices, adding either 5p or 10p depending on the product, but since then the outlook has worsened as a result of the war in Ukraine. When and if prices will go up more as a result, is yet to be seen.
Mr Whiteside said: “The biggest knock on effect of the war and its consequences is that Ukraine is a supplier of cereals and sunflower oil products that is fed into the global commodities market. Energy, cereal, oil all feed into all food really, so basically you’ve got across the board food inflation.
“We haven’t made any decisions yet on what that means in terms of pricing going forward because that will depend on how the market develops. We won’t move prices unless the market moves - this is all about how the market responds to consumer behaviour once their disposable incomes come under pressure. So I’m not able to tell you what we’ll do because I genuinely don’t know.
“What we won’t do is jeopardise our price leadership position in the market sector in which we compete.”
During the year Greggs recorded 103 net openings and had 2,181 shops trading at January 1 as is now targeting 150 new shop openings a year, with the potential for at least 3,000 shops in the UK over time. It also plans to improve its existing portfolio of shops, with 200 refurbishments planned this year.
Later opening to 8pm is also set to be extended to 500 shops in the year ahead and its delivery service – which proved to be such a success in lockdown through Just Eat – is also set to be extended from 1,000 to 1,300 shops.
Looking ahead, Mr Whiteside said investments would be made in the firm’s supply chain, to aid the growth of the business as it expands with new stores. That will include Newcastle, in addition to its latest investment into the robotic automated freezer distribution facility at Balliol Park.
At the start of the year Greggs announced it is to get its first female boss after longstanding chief executive Mr Whiteside said he will retire in May.
Mr Whiteside – who has been responsible for a hugely successful period since taking over as Greggs’ CEO in 2013 – will be replaced by Roisin Currie, who is the company’s retail and property director.
He added: “It has been my privilege to have led this business for the past eight years, setting us on a new course to become the customers’ favourite for food-on-the-go. In that time, I have tried my best to change the things that needed changing but more importantly to protect and nurture those things that shouldn’t change - most importantly, the culture: the ‘what makes Greggs, Greggs’.
“Every business needs to constantly evolve to stay relevant for its customers and for that it needs the right strategic plan, but that is only part of the story.
“There’s never been an easy time. First we had Brexit, then we had Covid and now we’ve got an inflation crisis fuelled by a war. Basically this is life isn’t it? We’ve just got to cope with whatever the circumstances are. What Greggs has shown throughout all its history - and remember it’s more than 80 years old - we’re a very resilient brand, customers love us and as long as we keep doing the right thing for customers then they will stick with us.
“I’m feeling particularly pleased we’re able to hand over my reins to Roisin because she’s been working along side me for the last eight years, she is part of this plan and will protect and nurture our culture.
“In working alongside her for many years, I know that she embodies our values and will continue to protect them as she leads the business to meet the exciting growth opportunities that lie ahead.”
