Greggs saw like-for-like sales in its own shops rise 4.5% for the year to 3 January 2015, compared to a 0.8% decline in 2013, and increase 6.3% for the eight weeks to 28 February.
The chain, which recorded total sales up 5.5% to £804m for the year, said its coffee sales now stood at £1m a week. It said it saw strong growth in its ‘balanced choice’ range and growing customer participation in value deals.
In 2015 the company expects to 80 - 100 new shops, including further development of franchise partnerships, and close around 60 - 80 shops in the year. It said the strategy was to “increase our presence in travel, leisure and work-centred catchments”. It reiterated an eventual target of 2,000 stores in the UK and expects to return to growth in net shop numbers in the second half.
Chief executive Roger Whiteside said: “2014 was a year of significant change and an exceptional step up in performance for Greggs as we began to implement our new strategic plan centred on the growing food-on-the-go market. We have improved both our food offer and the shop experience for customers. Market conditions have been more favourable and like-for-like sales have grown throughout the year. This has resulted in record underlying profits for the financial year. Overall we are confident of delivering a further year of good growth and progress against our strategic plan in 2015.”
The company opened 50 new shops (including 20 franchised units) in the year and closed 71, resulting in 1,650 shops trading at year end. A total of 85% of its new shop locations were away from high streets such as in retail and industrial parks, motorway service stations and travel hubs. At the end of 2014 there were 45 franchised shops operating in travel and other convenience locations and Greggs said it continues to see this as a route to further growth.
Pre-tax profit before exceptional items grew by 41.1% for the year to £58.3m. As previously announced, there an exceptional charge of £8.5m reflecting one-off costs resulting from structural changes in the supply chain and support areas.
On the food to go market, the company said: “Market conditions improved during 2014 with continued recovery in the UK economy coupled with low inflation leading to rising real disposable consumer income. These general market conditions were helped by more benign weather conditions than the previous year when we suffered from snow in the winter and a heatwave in the summer. Our improved like-for-like sales performance has shown the Greggs brand can win in the highly competitive food-on-the-go market. We believe the overall market remains in growth with no sign of a slowdown in competitor new shop openings.”
