Greggs is to open more shops in supermarkets and airports, after the bakery chain reported higher sales thanks to strong demand for its evening pizza deals.
The company said sales rose 16% in its core chain in the six months to 1 July after it put up prices in January by 5p to 10p on many items, with its sausage rolls rising 5p to £1.20.
Reporting a 41% rise in pre-tax profits to £80m for the half year after total sales rose to £844m, the chief executive, Roisin Currie, said it had put up prices again by a similar amount, but on fewer items, in June.
She said the company continued to experience inflation, led by wages, despite a drop-off in the cost of food and energy. The group does not currently plan any more price rises for its customers but Currie said she expected costs to rise by about 7% in the six months ahead, down from an 11% rise in the first half.
“Inflation is cooling but it is still out there,” she said. “We are working hard to protect customers and offer great value.”
Currie said the company’s steady growth in the first half of 2023 had been down to its “value position”, which had driven continued demand from customers with squeezed household finances.
Greggs aims to capitalise on that with plans for 100 new outlets over the next six months focusing on travel hubs, such as stations and airports, and locations where the brand is underrepresented, such as supermarkets. Currie said the company’s first 24-hour drive-through would open before the end of the year.
“We have targeted travel locations and opened in airports like Glasgow, Cardiff and Gatwick,” she said. “We have a strong pipeline of new sites and will target more of those areas.”
The chain extended its trading hours into the evenings and post-4pm sales grew more strongly than any part of the day in the first half of the year as it introduced new hot foods such as pizza.
Matt Britzman, an equity analyst at Hargreaves Lansdown, said the company had a great opportunity with extended hours and new food ranges.
He added: “Forget sausage rolls: pizza and flatbread are the new best bites at Greggs as extended opening hours continue to hit the spot with consumers. This is a real opportunity if it can win hearts and minds at a time when disposable income is tight, the evening food-to-go market is huge and an area Greggs has barely scraped the surface of.”
Charlie Huggins, the manager of the quality shares portfolio at Wealth Club, said: “Greggs is in a far better position than most retailers and is more than holding its own. Should inflation continue to moderate, the business could really be in a sweet spot.”
