Greggs sales pick up as its mac and cheese goes viral
Sales at Greggs have picked up after the UK’s biggest bakery chain branched out into iced drinks, pizza boxes and a macaroni cheese that has gone viral on social media.
The bakery, which is headquartered in Newcastle upon Tyne, reported a 2.9% rise in comparable sales in the first 20 weeks of the year, with an improving trend in the last 11 weeks helped by warm, sunny weather.
New beverages and food on the shelves also helped step up sales growth, including a peach iced tea and a mint lemonade. Greggs said that a newly launched mac and cheese “went viral on TikTok”, with a video of the snack played more than 3m times.
Roisin Currie, the chief executive of Greggs, said consumers’ disposable income was on the rise, helped by the April increase in the legal minimum wage, but the evidence was that households were “saving, not spending, even though they have got more money in their pockets”.
She said Greggs had been helped by the good spring weather, which had “encouraged people to come out of their home more”, but added that consumers remained “cautious”.
Currie said the whole retail industry was in a “heightened state of alert” after the cyber-attacks on Marks & Spencer, the Co-op and Harrods, and Greggs had continued to invest in improving the security of its systems. Peter Green Chilled, a small food distributor to supermarkets, said it had been hit by a cyber-attack this week. “The industry is coming together to share learning,” Currie said.
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Shares in Greggs rallied on Tuesday, rising 6%. However, the stock has suffered this year, losing about a quarter of its value since January, amid broader concerns around slowing sales growth.
The near 3% sales rise marks an improvement compared with its recent performance – sales rose by 1.7% in the first nine weeks of the year and by 2.5% in the final quarter of last year.
John Moore, a senior investment manager at the wealth manager RBC Brewin Dolphin, said that while Greggs had been going through a tougher period recently, there were optimistic signs in the update. “Recent price increases … suggest the company is trying to right-size in the aftermath of the national insurance increases, recalibrating its rollout and growth ambitions,” he said.
This year Greggs increased the price of its sausage rolls by 5p to £1.30, blaming wage, tax and food cost rises. It formed part of an average 4% price rise on key items including coffee and doughnuts.
Currie defended the decision to increase prices at the time, saying the company had to pass on the rising cost of its wage bill after two-thirds of Greggs’s workers received a 6.1% pay rise in January.
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