Greggs, the British bakery, is poised for continued growth this year despite tighter household budgets. The company’s assortment of baked goods and introduction of new products are anticipated to support its forecasted performance.
Despite high inflation and squeezed disposable incomes, Greggs is expected to experience a 10% increase in profit this year. The company’s value offerings, along with the introduction of new products like chicken goujons and the vegan Mexican chicken-free bake, are driving customer spending.
Greggs witnessed a significant 15.7% increase in underlying sales across its 2,300 outlets during the 10-week period ending on May 13. The company anticipates a gradual normalization of these figures throughout the year as it surpasses comparisons to the Covid-affected periods experienced in early 2022.
Chief Executive Roisin Currie anticipates substantial growth for Greggs. Factors such as store openings in airports, extended operating hours, and the company’s ability to gain market share from competitors like McDonald’s and Costa Coffee are expected to drive this growth.
According to her, data from the Greggs app, which offers rewards for frequent purchases, indicates an increase in purchase frequency.
“Exciting new products in the range convince customers to come for those extra visits,” Currie said, adding that Greggs will launch a flat bread range and a sweet chilli chicken noodle salad box in the coming weeks.
Goodbody analysts characterized Greggs’ performance thus far as “highly resilient.”
Shares in Greggs have outperformed Britain’s midcap index with a remarkable 27% surge in the past six months. However, in early Tuesday trading, the stock experienced a marginal 0.7% decline.
According to Refinitiv data, analysts predict that Greggs will report a pre-tax profit of approximately £163 million ($205.7 million) for 2023, compared to £148.3 million in 2022.
