Greggs PLC Q3 Trading Update (4310O)
03 October 2023 - 5:00PM
UK Regulatory
TIDMGRG
RNS Number : 4310O
Greggs PLC
03 October 2023
3 October 2023
GREGGS PLC
("Greggs" or the "Company")
Q3 TRADING UPDATE
Strong trading continues; inflation beginning to ease
Q3 highlights
-- Total sales up 20.8% for the 13 weeks to 30 September 2023
-- Company-managed shop like-for-like* sales up 14.2% for the 13 weeks to
30 September 2023
-- 82 net new shops opened year-to-date (144 openings less 62 closures)
-- Expect between 135 and 145 net shop openings in 2023 and circa 40 relocations
-- Continued growth in market share driven by strategic initiatives:
o Evening trade represented 8.8% of company-managed shop sales
for the
13 weeks to 30 September 2023
o 13.1% of company-managed shop transactions scanned on the
Greggs App in the 13 weeks to 30 September 2023
-- Delivery service rolling out with a second delivery partner,
Uber Eats, following successful trial
-- Some easing in cost inflation as expected
-- Full year outcome expected to be in line with our previous expectations
* Like-for-like (LFL) company-managed shop sales performance
against comparable period in 2022
Trading performance
Greggs continued to enjoy a strong trading performance over the
third quarter of 2023 with total sales up 20.8 % and like-for-like
sales in company-managed shops rising by 14.2% when compared with
the same period in 2022.
This strong LFL performance, founded on increased customer
visits, reflects ongoing development of evening trading and of our
digital channels and loyalty programme through the Greggs App.
Evening trade (sales post-4pm) represented 8.8% of company-managed
shop sales for the 13 weeks to 30 September 2023 (H1 2023: 8.3%)
and Greggs App participation continues to grow, with 13.1% of
company-managed shop transactions scanned in the 13 weeks to 30
September 2023 (H1 2023: 10.6%). Market insight data confirms that
Greggs continues to grow its share of the food-to-go market and has
maintained its leadership positions in customer satisfaction and
value-for-money ratings (source: Circana, August 2023).
Our autumn menu is now available, featuring the Spicy Chicken
and Veg Bhaji Baguette, served hot. New vegetarian options include
the Cheese and Honey Mustard Toastie, the Veg Bhaji Flatbread and
the Mozzarella and Cheddar Bites, offering customers a new
hot-to-go snacking option. We've also introduced the Spicy Veg
Pizza, available to customers on Click + Collect and via delivery.
Additions to the hot drink menu include the return of the popular
Pumpkin Spice Latte and the new Hazelnut Mocha and Hazelnut Hot
Chocolate.
Shop estate and supply chain development
In the year to date we have opened 144 new shops and closed 62
shops, giving a total of 2,410 shops trading at 30 September 2023
(comprising 1,928 company-managed shops and 482 franchised units).
We expect 2023 to be a record year for the absolute number of new
shops opened as we expand into new locations and relocate shops to
better premises within existing catchments. For the year as a
whole, and taking into account relocations and closures, we now
expect between 135 and 145 net shop openings and see a strong
pipeline ahead for 2024. Our shop openings are giving customers
more convenient access to Greggs, whilst our relocation activity
increases our capacity in existing successful catchments.
Investment in our supply chain is progressing well, supporting
our ambitious growth plans. A fourth production line will be
commissioned at Balliol Park in Newcastle upon Tyne in the coming
weeks, adding further manufacturing capacity for our iconic savoury
rolls and bakes. Work is progressing well to expand the logistics
capacity of our Birmingham and Amesbury distribution centres, both
of which are due to come on stream in 2024.
Across the business we continue to expect capital expenditure in
2023 to be around GBP200 million, supported by our strong balance
sheet.
Extension of delivery service
At our interim results we announced we had initiated a trial
with a second delivery aggregator. We have now concluded these
trials to test the incremental benefit of making Greggs available
for delivery on the Uber Eats platform, alongside our existing
partner Just Eat. We have begun an accelerated roll out on the Uber
Eats platform and expect to have around 500 shops live by the end
of October 2023, with further expansion to come in 2024.
Outlook
As we had expected, the rate of cost inflation has eased as we
annualise on the significant commodity-led increases experienced in
2022. At a time when customers are looking to make their money go
further Greggs continues to offer exceptional value and grow market
share. We have strong product and promotional plans for the fourth
quarter and the extension of our delivery service will make Greggs
accessible to more customers on more occasions.
Whilst acknowledging the uncertainty in the economy as a whole
and the very strong comparative performance of the business in the
fourth quarter of 2022, the Board expects the full year outcome to
be in line with its previous expectations.
ENQUIRIES:
Greggs plc Hudson Sandler
Roisin Currie, Chief Executive Wendy Baker / Nick Moore / Emily Brooker
Richard Hutton, Chief Financial Officer Email: greggs@hudsonsandler.com
David Watson, Head of IR
Tel: 0191 281 7721 Tel: 020 7796 4133
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