Greggs sales pick up as its mac and cheese goes viral
Sales at Greggs have picked up after the UK's biggest bakery chain branched out into iced drinks, pizza boxes and a macaroni cheese that has gone viral on social media.
The bakery, which is headquartered in Newcastle upon Tyne, reported a 2.9% rise in comparable sales in the first 20 weeks of the year.
New beverages and food on the shelves helped step up sales growth, including a new peach iced tea, mint lemonade, and a mac and cheese that has amassed thousands of views on TikTok.
Shares in Greggs rallied in early trading on Tuesday, up by as much as 6%. However, the stock has suffered this year, losing about a quarter of its value since January, amid broader concerns around slowing sales growth.
The near-3% sales rise marks an improvement compared with its recent performance – sales rose by 1.7% in the first nine weeks of the year and by 2.5% in the final quarter of last year.
John Moore, a senior investment manager at the wealth manager RBC Brewin Dolphin, said that while Greggs had been going through a tougher period recently, there were optimistic signs in the update.
'Recent price increases … suggest the company is trying to right-size in the aftermath of the national insurance increases, recalibrating its rollout and growth ambitions,' he said.
Earlier this year Greggs increased the price of its sausage roll by 5p to £1.30, blaming wage, tax and food cost rises. It formed part of an average 4% price rise on other key items including coffee and doughnuts.
The chain's chief executive, Roisin Currie, defended the decision to increase prices at the time, saying the company had to pass on the rising cost of its wage bill, after two-thirds of Greggs's workers received a 6.1% pay rise in January.
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The chain, which now has more than 2,000 shops, opened a record 226 last year, closed 28 and relocated 53. It said on Tuesday that it had opened 66 new shops this year, and closed 46, which included 21 relocations. It expects between 140 and 150 net openings this year.
Elsewhere, its rival SSP, the owner of food outlets such as Upper Crust and Camden Food Co, reported a 5% increase in comparable sales in the first half of its financial year. Shares in the business rose nearly 2% in early trading.
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