Greggs gains momentum after lacklustre start to the year
Greggs has reported an uptick in sales boosted by its expanded food and drink offering.
Its share price rose six per cent as investors cheered the return to strong trading.
The FTSE 250 company reported a 2.9 per cent increase in sales in the 20 weeks to May 17, an improvement from 1.7 per cent growth in the first nine weeks of the year.
Total sales were up 7.4 per cent to £784m, from £730m in 2024. This follows double-digit increases in like-for-like sales last year.
Its number of shops reached 2,638, with 20 net openings during the 20 weeks.
The company “remains confident” in a further 140-150 net openings for the full year.
Greggs said that product innovation was key in boosting sales during the second quarter of the year, with over-ice drinks and pizza boxes performing particularly well.
It continues to expand the range on offer, with an extension of healthier meals alongside chicken burgers, wraps and fish finger sandwiches.
The sausage roll-maker has been making a push into the late-night trade recently, with selected stores open past 4pm and some open until 2am.
Both the menu extension and the late-night drive form part of chief Roisin Currie’s strategic growth plan for the brand.
Greggs growth risks
Greggs noted that the market environment remains “challenging”, but said its expectations for the full year remained unchanged.
It has previously flagged the impact of cost inflation and higher wage taxes, which controversially pushed the company to increase the price of its flagship sausage roll in January.
Analysts have been concerned about the slowing rate of growth at Greggs, with “lacklustre” like-for-like sales and a risk of contraction.
Its share price took a knock earlier this year after its first-quarter results worried investors.
The stock fell by a quarter in January and has yet to fully recover, although it was unaffected by the market chaos of Trump’s tariffs.
The share price has fallen by 36 per cent since its September 2024 peak.
John Moore, senior investment manager at RBC Brewin Dolphin, said: “There are tentative signs that Greggs is making progress in today’s update, with sales continuing to rise, the shop portfolio growing, and expectations for the year unchanged.
“Slowing growth will still be a concern, as well as the wider question about whether we have reached ‘peak Greggs’ in the UK. Nevertheless, the baker is a resilient and innovative business that has proven its ability to bounce back from tricky times.”