Greggs PLC: Announces Q4-2022 Trading Update

Newcastle upon Tyne / UK. (gs) British Greggs PLC, the leading bakery food-on-the-go retailer in the UK with around 2,300 retail outlets throughout the country, announced its trading update for the 52 weeks ended 31 December 2022 (2021: 52 weeks ended 01 January 2022). A strong fourth quarter ends a year of encouraging strategic progress, the company reports in its statement. A robust financial position supports growth plans. Fourth quarter and full year 2022 highlights:

  • Financial year 2022 (“FY22”) total sales up 23.0 percent to GBP 1,513m (2021: GBP 1,230m)
  • LFL sales for fourth quarter up 18.2 percent
  • LFL sales for FY22 up 17.8 percent
  • 186 new shops opened in the year, 39 closures
  • 2,328 shops trading as at 31 December 2022
  • Strong growth in digital and early evening sales
  • Robust cash position to support investment in growth plans
  • Anticipate full year outcome in line with our previous expectations

Chief Executive’s Commentary

CEO Roisin Currie: «I am proud of the progress Greggs made during 2022 in challenging conditions. Our teams did a magnificent job serving customers and managing the growing demand for Greggs products as we expand our shop estate and offer greater availability through digital channels and longer trading hours, whilst continuing to extend our menu to offer more choice.

«We enter 2023 in a strong financial position that will enable us to invest in shops and supply chain capacity to bring Greggs to even more customers across the UK. While market conditions in 2023 will remain challenging, our value-for-money offer of freshly-prepared food and drink is highly relevant as consumers look to manage their budgets without compromising on quality and taste.»

Trading update

Sales for FY22 were GBP 1,513 million, an increase of 23.0 percent compared with the equivalent period in 2021. Like-for-like sales in company-managed shops were 17.8 percent higher than sales seen in 2021.

Despite the impact of adverse weather and strikes at the end of 2022, fourth quarter like-for-like sales in company-managed shops grew by 18.2 percent. This reflected a favourable trading pattern leading into the Christmas period and softer trading conditions in the comparable quarter of 2021 as a result of disruption caused by the omicron variant of coronavirus.

Seasonal lines were in high demand in the fourth quarter, including our iconic Festive Bake, which featured alongside its vegan-friendly alternative, our shop-baked Sweet Mince Pies and our festive hot drinks including the Salted Caramel Latte. Plant-based foods are contributing more significantly to our range over time and the introduction of new hot options such as the Vegan Festive Baguette is testament to this trend.

At a time when consumers are increasingly focused on value, we have seen strong growth in use of the Greggs App. This rewards customers for their loyalty with free products across our entire range, as well as giving access to features such as Click + Collect, nutritional information and delivery options.

During the year we opened 186 new shops (including 70 franchised units) and closed 39, growing the estate to 2,328 shops as at 31 December 2022, 441 of which are franchised shops operated by our partners. 500 of our shops are now open until 8pm and early-evening is now the fastest growing daypart as we extend availability to both walk-in and delivery customers.

Financial position and outlook

Greggs ended 2022 with a cash position of GBP 191 million, partly reflecting phasing of capex investment, which we have previously described. This will support our plans to invest further in growing both our shop estate and supply chain capacity in the year ahead. The pipeline of new shop opportunities remains strong and we expect to open around 150 net new stores again in 2023.

Given our strong trading in the year, together with careful cost control, we anticipate reporting a full year outcome for FY22 in line with our previous expectations when we report our preliminary results for 2022 on 7 March 2023.

We continue to see material cost inflation in the year ahead. However, whilst consumers are clearly seeing pressures, our value offering remains attractive in the food-on-the-go market. We are confident in delivering another year of good progress in 2023 and remain excited by the significant growth opportunity for Greggs in the years ahead.