Greggs warns of increasing cost pressures
By Frank Prenesti
Date: Monday 16 May 2022
(Sharecast News) - UK baker Greggs warned of increasing cost pressures and reported a rise in first-quarter sales which were "flattered" by comparison with restricted trading conditions in pandemic-restricted 2021.
The company, famed for its range of sausage rolls and other pastries, tand said it expected figures to normalise against comparisons with more "robust" trading periods last year after pandemic lockdowns eased.
Greggs said like-for-like sales in company-managed shops grew by 27.4% in the first 19 weeks of this year.
Like-for-like sales growth in the 10 weeks to May 14, when pandemic lockdowns in 2021 were easing, had averaged 15.8%.
Total sales for the period rose to £495m from £378m. The company held annual guidance, but said cost pressures were increasing as a result of inflation and the cost-of-living crisis.
"Looking ahead, market-wide cost pressures have been increasing and consumer incomes will clearly be under pressure in the second half of the year. We will continue to work to mitigate the impact of cost pressures whilst protecting Greggs' reputation for exceptional value."
The company said sales levels in larger cities and in office locations continued to lag the rest of its estate but transport locations had shown a marked increase in activity in recent weeks.
It a net 43 new shops in the first 19 weeks, taking the total to 2,224. It sees potential for at least 3,000.
Greggs in March warned that it did not expect material profit growth this year on the £145.6m made in 2021 due to the surging cost of raw materials, energy and staff.
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