Greggs have marked a significant bounce back from the headwinds of the pandemic in 2022 with sales rising 23.0% to £1,513m.
The ‘on-the-go’ nature of Greggs bakery business model meant the company was always set to suffer during a period people worked from home and travelled less due to COVID-19. Greggs 2020 sales sank to £811m from £1,167m in 2019 as the pandemic rocked the economy.
However, as the UK economy reopened, Greggs recorded £1,229m revenue in 2021 and in 2022 revenue surged once more to levels well in excess of pre-pandemic sales.
Like-for-like sales were 17.8% higher while the baker opened an additional 186 stores.
“Greggs is seeing increased usage of its app loyalty rewards scheme, as customers flock to value during the cost-of-living crisis. The bakery-chain’s pricing is being held as a key area of strength in current conditions, and has meant that together with cost savings, margins have held up for the full year. Specifically, demand has been helped by a strong reaction to Greggs’ festive goods, including the Festive Bake and vegan options,” said Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown
“Greggs is so confident its strong trading will continue, it’s planning to open 150 shops this year, and is continuing with extended opening hours at over a fifth of its sites. Later-day trading is proving popular as the group rolls out click and collect options.”
The combination of a greater adoption of online engagement and a softening in the economic backdrop is supportive of Greggs sales going into 2023.
“While restaurants might be suffering as more people eat from home, a £1.20 sausage roll ‘on the go’ is still seen as an acceptable purchase even if money is tight, hence why Greggs is standing proud,” said AJ Bell investment director Russ Mould.
Nonetheless, Greggs shares were broadly flat on Thursday as investors choose to focus on a benign earnings outlook hampered by rising costs.