FDBusiness.com

Greggs, the leading bakery food-on-the-go retailer in the UK, with over 1,950 retail outlets throughout the country, has reported a 7.2% rise in total sales to £1.029.3 billion in 2018, the first time in its history that the business has generated turnover of more than a billion pounds in a year. Within this, company-managed shop like-for-like sales grew by 2.9%.

Underlying operating profit, excluding property profits and exceptional items, grew by 9.1% to £89.1 million. Pre-tax profit (including exceptional items) increased by 14.8% to £82.6 million.

Economic conditions remained challenging in 2018. Although inflationary pressures on consumers eased and they saw a return to growth in disposable incomes, confidence levels were low due to continued uncertainty regarding the economic outlook. The general retail sector saw continued declines in high street footfall as traditional business models struggled to adapt to the new dynamics in customer behaviour, whilst dealing with continued rising costs, particularly relating to labour.

In contrast to the general retail environment, the food-on-the-go sector overall continued to grow, though it remains highly competitive. Greggs has worked hard over the last five years to redevelop its shop estate in order to be less dependent on shopping locations, and to refocus its product range on growth categories and extended day-parts which have been key to the group’s success.

Roger Whiteside OBE (pictured above), chief executive of Greggs, comments: “2018 was a year that tested the resilience of Greggs’ business model and demonstrated the benefits of our strategic investment programme. The first half was significantly impacted by extreme weather but once this returned to normal our underlying strengths helped us recover the lost ground and deliver results for the year that exceeded our expectations.”

He continues: “Whilst there are significant uncertainties in the months ahead, Greggs has started 2019 in great form, helped in part by the publicity surrounding the launch of our vegan-friendly sausage roll. We hope to continue benefiting from this strong momentum during the first half of 2019 before facing stronger comparatives later in the year.   We have a strong financial position which we plan to use to invest in Greggs’ potential for further growth, whilst also delivering good returns for shareholders.”

Greggs opened 149 new shops during the year and closed 50. It also made good progress investing in consolidating its manufacturing operations, building logistics capacity to support around 2,500 shops.