Above inflation increases in the National Living Wage have helped drive sales growth at Greggs with millions of workers spending their extra cash on the chain’s signature bakes, pizzas and sausage rolls.
After a blip in sales over the turn of the year, which sent the share price crashing in January, Greggs appears to have recovered its poise with total sales up 7.4% in the 20 weeks to 17 May.
Like for like sales from the company’s 2,638 shops were 2.9% higher “with improved performance in the last 11 weeks supported by better trading conditions,” Greggs said in a trading update.
The upbeat tone of the statement propelled the shares, which soared nearly 8%, or 155p, to 2154p, in early trading.
Chief executive Roisin Currie said the 6.7% increase in the National Living Wage to £12.21 an hour that kicked in on 1 April was “putting more money in people’s pockets so people should be able spend more” although consumer confidence was still “not strong.”
She said sales were also boosted by a strong roster of new and enhanced food and drink products that included Feta, Red Pepper and Spinach Bake and a Fat-Free Greek Style Yoghurt with Strawberry Compote. Two new flavours were added to the over-ice drinks range, Peach Iced Tea and Mint Lemonade.
The made to order range, including chicken burgers, wraps and fish finger sandwiches is now available in over 300 shops after a trial last year while the newly launched Mac and Cheese was in hot demand after going viral on TikTok.
Over the first week of the year Greggs opened 66 new shops, but closed 46, making a net 20 openings in total. London openings included locations at St Pancras and Wembley Park with Great Portland Street scheduled for a June launch.
Currie said the company was confident of hitting 140 to 150 net openings over the full year.
In a statement Greggs said: “The improved like for like sales performance has been delivered in what remains a challenging market context, and during a period that compares with our strongest performance in 2024.
“Our investment programme is on track and there has been no change to the outlook for cost inflation, which we expect to be around 6% on a like for liker basis. Our plans for managing the inflationary headwinds are progressing well and, whilst early in the financial year, the Board’s expectations for the full year outcome remain unchanged.”
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.