Greggs, the British food-to-go retailer, anticipates another year of growth in 2024 following a 13% increase in profit last year. This growth was fueled by robust demand for breakfast offerings, extended evening hours, and the expansion of food delivery services.
The Newcastle upon Tyne-based company, renowned for its sausage rolls and vegan steak bakes, announced on Tuesday that the expansion of new outlets in supermarkets, train stations, airports, and the introduction of drive-thrus would fuel its growth.
Greggs shares rose by 2% to 2,760 pence in early trading as the company confirmed a strong start to 2024, with underlying sales increasing by 8.2% in the first nine weeks.
Greggs affirmed that its five-year plan to double sales by 2026 and establish 3,000 stores in the long run remained on course. This trajectory comes as Britons, grappling with elevated inflation and interest rates, increasingly seek value-oriented options.
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“You can shop with us a few times a week and still be cheaper than potentially having a few coffees somewhere else. We know that encourages frequency of purchase,” Chief Executive Roisin Currie said in an interview.
With 2,473 stores, the company recently surpassed McDonald’s as Britain’s leading breakfast on-the-go retailer, a testament to the popularity of its hot food selections, Currie noted.
According to Currie, customers now have the option to purchase their evening meals at Greggs, with half of its stores operating late hours. Alternatively, they can choose to stay home and order a Greggs pizza or chicken shawarma flatbread through platforms like Just Eat and Uber Eats.
In 2023, Greggs reported a 13% increase in underlying pretax profit, excluding exceptional income, reaching £168 million ($213 million), with total sales reaching £1.8 billion. Analysts anticipate a further 11% increase in profits for the current year.
The group said it would pay a special dividend of 40 pence per share on top of its 62 pence annual payout.
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