Bakery chain Greggs (GRG.L) is set to add up to 145 new stores by the end of this year and to introduce more vegetarian products to its menu.
The company said it plans to sell a “veg bhaji flatbread and cheese and honey mustard toastie” in its autumn menu, alongside its traditional sausage rolls and bakes.
The company has seen 82 store openings so far this year, taking it to 2,410 outlets in total, with plans to open a total of between 135 and 145 in 2023.
It expects to have around 500 shops live with Uber Eats by the end of October 2023, with further expansion to come in 2024.
Greggs sales on the rise
Total sales for the 13 weeks to 30 September were up 20.8% and its full-year performance is expected to be in line with forecasts.
The company also noted that it had seen some easing in cost inflation and said company-managed shop like-for-like sales were up 14.2%.
“The cost of raw materials, energy and wages have risen rapidly over the last year, but encouragingly these cost pressures are now beginning to ease. This isn't just good news for profit margins but should also help underpin consumer demand by reducing the need for price increases,” said Charlie Huggins, manager of the quality shares portfolio at Wealth Club.
At the start of 2023, the outlook for Greggs was not looking good, according to Huggins. “But the economy has held up better than expected and the group's execution has been excellent. With cost pressures easing, the business looks well primed for a return to profit growth in 2024,” he said.
No plans to increase prices
Greggs' CEO Roisin Currie told Reuters that the company is not planning to increase prices pre-Christmas and there is still significant inflation in the market, including staff wages.
"The bakery’s offering of drinks and snacks with speedy service have been enjoying strong sales from workers and other people on the go. Despite the cost of living crisis with consumers forced to make cutbacks, demand at Greggs remains robust thanks to its competitive pricing and appealing range of hot and cold items," said Victoria Scholar, head of investment at Interactive Investor.
Shares in Greggs are up over 40% over the past year. However, they have been giving back some gains since the May highs and are under pressure today.
Greggs stock was down nearly 3.05% on Tuesday in London.
"Nonetheless the analysts remain bullish on the stock with eight buy recommendations versus three holds and zero sells,” Scholar said.