Challenging weather conditions at the start of 2025 has resulted in a slowdown of sales growth at Greggs, following its record-breaking £2bn turnover year.
In its preliminary results for the 52 weeks ended 28 December 2024, the bakery chain reported like-for-like sales in company-managed shops were up 5.5% year-on-year in 2024. However, the growth figure was down to 2.5% in the fourth quarter with current trading showing a further drop to 1.7% for the first nine weeks of 2025.
Greggs share price lost around 25% of its value in early January and decreased a further 10% following its latest filing. It gave out a total ordinary dividend per share of 69p, up 11.3% from 2023, and is to make its highest-ever profit sharing of £20.5m with its employees.
Things are looking up again, though, with Greggs revealing that trading has improved from January to February and saying it remained confident of managing inflationary headwinds and delivering “another year of progress in 2025”.
Total sales jumped 11.3% to £2bn and pre-tax profit rose 8.3% to £203.9m, although much of this growth was driven by estate expansion. Greggs added 145 net openings in 2024 to end the year with 2,057 company-managed shops and 561 franchised units – it also refurbished 165 existing sites.
This year, it is targeting between 140 and 150 net openings this year with a focus on broadening its presence away from traditional high street locations. Greggs said it continues to see clear opportunity for significantly more than 3,000 UK shops over longer term.
Greggs said that its brand strength and customer proposition was of paramount importance in a year of low consumer confidence with a food-to-go market that wasn’t growing, citing the GfK Consumer Confidence Tracker through 2024 and Circana, Barclaycard, Springboard MRI data from December 2024.
It also heralded extensions to its Healthier Choices menu like the Mexican Bean & Spicy Cheese Flatbread for the Autumn season and the Festive Flatbread for Christmas. Following the continued success of its hot menu trials, Greggs rolled out the range to more shops and added new items such as the BBQ Crispy Chicken Burger and BBQ Chicken Wrap earlier this year.
Evening trade remained the brand’s fastest growing daypart, accounting for 9% of company-managed shop sales in 2024 compared to 8.5% the year prior. Menu development including launches of the BBQ Chicken & Bacon Pizza and four-slice sharing box supported its further growth ambition.
Like in its previous preliminary results, Greggs reported growth figures from its digital channels. The number of customers scanning the Greggs App for company-managed shop transactions was up from 12.5% in 2023 to 20.1%, with the company noting that app engagement was proven to increase visit frequency. Greggs sites offering delivery had also increased to 1,556 (2023: 1,440) with deliveries representing 6.7% of company-managed shop sales (2023: 5.6%).
Greggs CEO Roisin Currie recalled that back in 2021, the company had set its sights on doubling revenue by 2026. “Three years into this five-year plan, sales are on track and we continue to be confident in the growth opportunity in front of us,” she commented.
“The brand is in better shape than ever, with a material opportunity to continue growing and developing the Greggs estate and plenty of scope to continue to grow in newer dayparts and channels,” added Currie.
‘Far from ugly’
Reacting to Greggs’ full year results, Robinhood UK lead analyst Dan Lane said: “Profits are up but it’s not the stellar performance the market is used to. The picture at Greggs is far from ugly though, a rising dividend and sector leadership might be enough to keep shareholders around through a tough spot for all consumer-facing businesses.
“Greggs just needs to make sure looming employer national insurance contribution cost concerns don’t end up pushing prices beyond customer appetites. There was a huge reaction to January’s decision to raise the cost of a sausage roll by 5p to £1.30, so the customer base is clearly tuned in to the inflationary environment and where they see Greggs in it,” added Lane.
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