FDBusiness.com

Greggs, the UK’s largest retail baker, increased total sales by 7% to £894.2 million in 2016 as underlying operating profit grew by 8.6% to £78.1 million and pre-tax profit (including exceptional items) rose by 2.9% to £75.1 million. Greggs is the leading bakery food-on-the-go retailer in the UK, with over 1,750 retail outlets throughout the country.

“In 2016 we delivered another strong performance as we continued on our journey to transform Greggs from a traditional bakery business into a modern, attractive food-on-the-go retailer,” says Roger Whiteside, chief executive of Greggs. “Our product offer is evolving to meet the changing needs of our customers and our shop estate and service levels have benefited from significant investment.”

He continues: “The UK consumer outlook is more challenging than we have seen in recent years, with industry-wide pressures emerging in commodities as well as labour costs. However we are confident of making further progress as we implement our plan to grow Greggs as a contemporary food-on-the-go brand.”

Greggs has embarked on a major £100 million investment programme, announced in March 2016, designed to increase capacity and efficiency in shop distribution to support substantial shop growth alongside improved quality and efficiency in the group’s bakery manufacturing operation by centralising production.

Roger Whiteside, chief executive of Greggs.

During 2016, Greggs opened a new distribution centre in Enfield and closed both its Twickenham and Sleaford bakeries. Good progress was also made with the extension of its bakery in Glasgow, which will facilitate the closure of the Edinburgh Bakery in the second quarter of 2017. Greggs has also undertaken detailed planning for the subsequent investment phase across its remaining bakery sites. Greggs expects that it will take approximately two years to implement the transformation of the use of space and equipment across its bakery network.

“Once implemented this new supply chain platform will substantially improve product quality, our competitiveness and, alongside system investment, will complete our transformation from traditional bakery to food-on-the-go,” explains Roger Whiteside. “This is our largest ever investment in our supply chain, reaffirming our strategic commitment to the competitive advantage offered through vertical integration and delivering an attractive return on investment.”

Greggs aims to increase its estate to substantially more than 2,000 shops. In 2016 it opened 145 new shops (including 56 franchised units) and closed 79, growing the estate to 1,764 shops trading as at 31 December 2016.