30th Apr 2014 12:14
LONDON (Alliance News) - UK bakery chain Greggs PLC Wednesday reported improving like-for-like sales for the first quarter of its new financial year, boosted by promotional deals, longer trading hours, and its push into the food-on-the-go market.
The group said it remains cautious about its outlook, as market conditions remain highly competitive. It said its profit for the first 17 weeks of the year was boosted by cost savings, lower input cost inflation and a profit gain on property disposals.
However, it said it expects the second half of the year to be more challenging, as it faces stronger sales comparatives and likely cost inflation.
"Overall we expect to deliver satisfactory financial results for the year and good further strategic progress.
Greggs said that total sales rose 4% in the 17 weeks to April 26, while like-for-like sales in its own shops grew by 3.7%, reversing a like-for-like sales decline of 4.4% last year, when sales were hit by bad weather conditions in the period.
"In line with our strategy sales growth is also being driven by improved availability of our freshly made sandwiches, longer trading hours and product upgrades such as our improved coffee blend, which is benefiting from inclusion within our popular promotional meal deals," the company said in a statement.
The group recently launched a new ?Greggs Rewards? mobile payment app, a reward loyalty scheme that it hopes will help it win back customers.
Greggs has also been busy revamping and improving its store portfolio, refurbishing its stores as well as closing smaller unnecessary stores.
During the period, Greggs said it completed 66 shops refurbishments into its bakery food-on-the-go format, as it tries to build a bigger food-on-the-go business to try and capitalise on growing consumer demand for those sort of products, rather then its take-home bakery products. It said it plans to refit around 200 shops this year.
"These are performing well and the contemporary new look and feel, along with additional facilities such as seating, is being well received by both customers and staff," it said in a statement.
Greggs opened 20 new shops during the quarter, including 11 franchised units in transport locations, and closed 28 shops.
"We have disposed of a number of freehold properties in the year to date. This has realised property profits of GBP1.4 million," the company said.
Greggs said the closure of its in-store bakeries is ongoing, and it expects the majority of closures to be completed by the end of this year.
Shares in Greggs were up 3.4% at 535.00 pence Wednesday early afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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