Greggs, a prominent high street bakery chain, recently announced a remarkable performance for its fiscal year, reporting a substantial 27% increase in full-year profits. This significant growth saw the group’s pre-tax profits surge to £188.3 million in 2023, compared to £148.3 million in the previous year. The primary driver behind this impressive financial performance was a robust 13.7% rise in like-for-like sales across the company-managed shops.
Delving deeper into the financials, underlying pre-tax profits also experienced a notable uptick, climbing by 13.1% to £167.7 million. However, the latter part of the year witnessed a slight slowdown in sales growth, with figures dipping to 9.4% in the final quarter. This deceleration was attributed partly to a reduced contribution from price inflation, signaling a potential shift in consumer behavior.
The trend of slower growth continued into the beginning of 2024, with comparable store sales growth further moderating to 8.2% in the first nine weeks of the year. Despite these challenges, Greggs expressed confidence in its ability to maintain positive momentum and achieve another year of progress. The company remains steadfast in its commitment to opening between 140 to 160 new shops in 2024, building upon the record-setting 220 store openings in the previous year.
Looking ahead, Greggs highlighted that inflationary pressures are gradually subsiding, and the company has gained improved visibility of costs for the upcoming year. Management reiterated their expectations for 2024, emphasizing that there is no change in their strategic trajectory. However, they cautioned that their anticipated cost inflation could range between 4% and 5%, subject to potential geopolitical risks.
Despite the challenges posed by the economic landscape, Greggs remains focused on its long-term growth strategy. The company reaffirmed its ambitious plans, initially set in 2021, to double sales over the course of five years. What began as a strategic vision has now evolved into a tangible reality, underscoring Greggs’ resilience and adaptability in navigating the ever-changing market dynamics.