Greggs saw an overall decline in sales in the third quarter. (Reuters/Reuters)
Bakery chain Greggs (GRG.L) said September was its strongest month in the third quarter with new additions to its autumn menu, but that was still enough to stop sales from softening for the period overall. He said it was not.
Greggs’ autumn menu, launched on August 29, includes new additions such as pumpkin spice donuts, Mexican bean and spicy cheese flatbreads and all-day breakfast baguettes.
The food-on-the-go chain also launched a new pizza option, BBQ Chicken, and said its pizza sharing boxes are available in four-slice and six-slice boxes.
Greggs said in a trading update published on Tuesday that September was its strongest month in the third quarter.
However, while Greggs reported continued sales growth, this latest update showed a slight slowdown. Like-for-like sales rose 5% in the third quarter, but slower than the 7.4% recorded in the first half and below the year-to-date growth rate of 6.5%.
Greggs shares have fallen 4.5% since this latest update, but are still up nearly 15% year-to-date.
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The company said the growth seen in the third quarter was supported by “further advances in menu development and extended trading hours and new digital channels.”
Greggs said: “While we recognize the continued economic uncertainty, the board expects full-year results to be in line with prior expectations.”
Additionally, the bakery chain said it expects the level of cost inflation to be closer to the lower end of its previously expected 4-5% range.
Russ Mold, investment director at AJ Bell, said: “Gregs has pursued multiple avenues to achieve growth in recent years, including home delivery, overnight trading and a successful foray into vegan products, but the latest updates There are some signs that this may be the case.” I have to pull another rabbit out of the hat. ”
He said the company was “not resting on its laurels” with continued innovation in its product range and an “ambitious store rollout programme”.
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Greggs has already opened 86 net new stores this year, including closures and relocations, and is on track to achieve its goal of opening 140 to 160 net new stores in 2024. said.
Third quarter openings include two drive-thrus in Bristol at Abbeywood Retail Park and Harlequin Business Park.
But Mr Mold said: “The vexing question for investors is when will Greggs reach saturation point?”
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He said: “Greggs’ significant investment in infrastructure to support further stores suggests that the company believes there will be continued room for growth for some time to come, with a number of “The company’s excellent track record over ten years means it is likely to gain a certain level of trust from shareholders.”
“However, achieving the scale of expansion outlined by Mr Greggs will not be easy and there may be some speed bumps along the way.”
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