Greggs also reported an operating profit rise of 1.8% to £27.6M, excluding property gains and exceptional charges. Its ‘Balanced Choice’ and breakfast ranges boosted profits, reported in its half-year trading update today (August 1).
Company-managed like-for-like sales were up 3.4%, after opening 61 new stores across the country. Greggs shareholders’ dividend per share increased 8.4% to 10.3p, it said.
Greggs chief executive Roger Whiteside said: “The business has traded in line with our plans during the first half of the year. We have made good progress with our strategic plans and remain confident of future prospects although we remain alert to short-term pressures on consumers’ disposable income.
“Over the year as a whole we expect to deliver results in line with our previous expectations as well as further progress against our strategic plan.”
Like-for-like sales growth increased after growth in hot food choices, and traditional savoury products – including sausage rolls. The Balanced Choice range expanded to include new salads and drinks.
Net 42 store openings
Greggs closed 19 stores across the 26 weeks to July 1, resulting in a net 42 store openings. It had 1,806 stores trading, as of the end of the quarter. The baker expected to open a further 39 stores over the remainder of its financial year.
But, Greggs paid out £8.3M in costs over the half related to restructuring, which included plans to cut 220 jobs in Wales and Scotland, according to unions. The baker confirmed it had finished its consultation process in May, and was looking to start the restructuring.
Meanwhile, in June, think-tank IGD revealed that the food-to-go market was a multi-million pound opportunity for manufacturers, after growing millennial demand.
Greggs half-year trading update – at a glance
- Sales up 7%
- Company-managed shop like-for-like sales up 3.4%
- Operating profit, excluding property gains and exceptional charge up 1.8%