Greggs PLC Trading Update (3039B)
October 06 2015 - 2:00AM
UK Regulatory
TIDMGRG
RNS Number : 3039B
Greggs PLC
06 October 2015
6 October 2015
GREGGS plc
THIRD QUARTER TRADING UPDATE
Greggs is the leading bakery food-on-the-go retailer in the
UK,
with 1,668 retail outlets throughout the country
Continued strong sales performance
Q3 2015 Q3 2014 YTD 2015 YTD 2014
------------- -------- -------- --------- ---------
Own shop
LFL sales
growth (%) 4.9% 5.2% 5.6% 3.9%
------------- -------- -------- --------- ---------
Total sales
growth (%) 5.0% 4.0% 5.1% 3.4%
------------- -------- -------- --------- ---------
-- Own shop like-for-like sales up 4.9% for the 13 weeks to 3 October (2014: 5.2%)
-- 158 refits completed year to date, 20 conversions of larger bakery cafés
-- 65 new shops opened year to date, 47 closures
-- Balanced Choice and hot food options proving popular
-- Low inflation environment continues
-- Expansion of partnership with Euro Garages
-- Acquisition of distribution centre to support growth plans
Trading performance
We have traded well in the third quarter, delivering increased
sales while controlling costs. In the 13 weeks to 3 October 2015
like-for-like sales in our own shops grew by 4.9 per cent against
strong comparatives, slightly ahead of our expectations. In the
year to date like-for-like sales have increased by 5.6 per cent.
Total sales grew by 5.0 per cent in the 13 weeks and have grown by
5.1 per cent in the year to date.
Product initiatives across the day combined with our great value
deals continue to drive increased customer visits and transaction
values. The extension of our Balanced Choice range to include
improved own-label drinks with no added sugar has proved popular
with customers. With colder weather approaching we have relaunched
our hot food menu with a range of delicious soups and hot
sandwiches. New additions to the menu include the Mildly Spiced
Chicken Curry Soup and Peri Peri Chicken Flatbread, both of which
are part of our Balanced Choice range. Other additions to the hot
menu include the Aberdeen Angus Spicy Meatball Melt Baguette. Our
seasonal range for Halloween is back in shops, including the
popular Bat Biscuit and Spooky Ring Bun.
Shop estate development
In the year to date we have completed 158 shop refurbishments
and are on track to complete around 200 shops this year. In
addition we have now converted 20 of our larger bakery cafés to the
"bakery food-on-the-go" format. This investment in refurbishing our
estate continues to provide a good capital return and is
transforming the quality of the shopping environment for our
customers.
We have now opened 65 new shops in 2015, including 35 franchised
units predominantly in transport locations. We have closed 47
shops, giving a total of 1,668 shops trading at 6 October
(comprising 1,588 of our own shops and 80 franchised units).
Our work with franchise partners is extending the Greggs offer
to previously inaccessible locations, particularly transport sites.
Our relationship with Euro Garages Limited has so far led to the
development of Greggs outlets in 30 of their forecourt sites. We
have now agreed to extend this to a further 27 sites that are
undergoing refurbishment in the fourth quarter. As a result we now
expect our shop numbers for the full year to increase by a net
50-60 overall.
To support the growth potential of the business we have been
examining ways of extending our distribution network, particularly
in the south-east of England where our existing capacity is most
constrained. As a result we have recently acquired a freehold
distribution depot adjacent to our existing bakery in Enfield. The
total investment, including conversion works, is likely to be
around GBP13m and we expect that the facility will be brought into
use in the second half of 2016.
Outlook
Market conditions remain favourable with low cost pressures and
a stronger consumer environment. We expect this to continue through
to the end of the year after which increases to wage rates will
drive greater inflationary pressure. Our standard rate for
hourly-paid shop staff is already above the National Minimum Wage
and we will maintain a competitive position in the market going
forward.
Our sales performance is slightly ahead of our previous plan
and, whilst comparatives will stiffen further in the fourth
quarter, sales will benefit from additional shop openings. As a
result we expect to deliver good growth for the year, slightly
ahead of our previous expectations, and further progress against
our strategic plan.
ENQUIRIES:
Greggs plc Hudson Sandler
Roger Whiteside, Chief Executive Wendy Baker / Alex Brennan
Richard Hutton, Finance Director Tel: 020 7796 4133
Tel: 0191 281 7721
This information is provided by RNS
The company news service from the London Stock Exchange
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