14th May 2024 17:26
(Alliance News) - Greggs PLC reported growth in the first few months of its financial year, and the baker noted its "strong" pipeline as it maintained its net store openings guidance.
The Newcastle, England-based bakery chain said total sales in the first 19 weeks of 2024 rose 14% to GBP693 million from GBP609 million last year.
On a like-for-like basis, with sales growth at 7.4% over the 19 weeks, Greggs underperformed the 17% growth seen over the same period last year.
Edison analyst Russell Pointon commented: "Greggs' trading update for the first 19 weeks of the year shows that the company is driving superior revenue growth from its key initiatives of growing space, delivery and evening sales and leveraging the app along with its continuous menu enhancements, despite what has continued to be a challenging backdrop for consumers. The strong revenue growth on top of a tough comparative from the prior year includes both volume and price growth, which compares very well versus many other consumer-facing companies."
The company has progressed plans to increase capacity with the opening of 64 new shops across the UK, including 15 with franchise partners.
Meanwhile, 37 locations were closed giving the company a total of 2,500 shops trading as of May 12.
"The pipeline for the remainder of the year is strong, including a number of further opportunities with supermarket groups, and we remain confident in achieving 140-160 net openings for the full year," the company said.
In other news, manufacturing and logistic network capacity is to be expanded following an agreement with Segro PLC for a lease of a facility at its SmartParc in Derby.
The site, which is currently under development, will begin operations through 2025 and 2026.
Greggs is to pay GBP65 million on the commencement of the lease, alongside costs associated with the installation of equipment.
Furthermore, negotiations pertaining to the purchase of land in the Northamptonshire are underway with the company hoping to establish a national distribution centre for chilled and ambient goods to accommodate approximately 3,500 stores.
The exchange of contracts is expected to occur in the coming months.
By Eric Cunha, Alliance News news editor
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