Greggs has hailed easing inflationary pressures after the UK’s biggest bakery chain rang up bumper Christmas sales amid less travel disruption and enthusiasm for seasonal specialities such as festive bakes and chocolate orange muffins.
The company said sales at established stores had risen 9.4% in the three months to 30 December as it attracted more customers with extended opening hours and by offering online ordering.
Better weather and fewer transport strikes than in the same period in 2022 also contributed to growth, the chain said, as did higher prices on some items – although at a lower rate than earlier in the year.
Extending its ranges had also helped sales, it said, with festive bakes, chocolate orange muffins and Christmas lunch baguettes “in high demand”, while pizza sales continued to perform strongly.
Greggs said it had increased prices by between 5p and 10p on a some items last month but had held down the cost of bestselling items such as sausage rolls.
Roisin Currie, the chain’s chief executive, said the price rises were to help fund a pay increase for workers implemented this month, with store staff getting a 9.6% rise to at least £11.62 an hour, ahead of the new legal minimum wage of £11.44 from April for those 23 or older, but behind the independently verified living wage of £12.
She said Greggs had “no plans” to increase prices across its ranges as it expected a more stable cost base over the year ahead. Currie added that any further price rises would be “minimal and would protect our value proposition”.
The strong Christmas topped off a good year for the Newcastle-based business, with sales rising by almost 20% to £1.8bn in the year to 30 December as it bounced back with the return to high streets after the coronavirus pandemic.
The company plans to step up the pace of growth and open up to 160 shops in the year ahead, having opened a net 145 last year, taking the total to 2,473. Greggs shares rose 8.5% in early trading on Wednesday.
Currie said: “I am proud of our teams, who did a fantastic job serving more customers as we continue to grow our shop estate and offer greater availability through digital channels and extended trading hours.
“We enter 2024 with plans to continue to invest in our shops and expand supply chain capacity to deliver the growth strategy, supported by our strong balance sheet.”
The company added in a statement that while wage inflation remains, “inflationary pressures are reducing and with good forward cover on food, packaging and energy we anticipate a more stable cost base in the coming year”.
It added that while higher rates of pay added to the bakery chain’s costs, increased wages across the economy would also support shoppers’ incomes.
