Bakery chain Greggs said on Tuesday that the full-year outcome was set to be ahead of its previous expectations following a strong sales performance in the third quarter, but also warned over inflationary pressures.
The company, known for its sausage rolls, said two-year like-for-like sales were up 3.5% in the third quarter despite staffing and supply chain disruption. Growth was particularly strong in August thanks to the ‘staycation’ effect, and remained positive in September, with two-year LFL growth of 3% in the four weeks to 2 October.
Delivery sales have continued to develop well, it said, with 943 shops now supplying customers through this channel.
Greggs said the broadening of its vegan-friendly options has been well received, in particular the limited edition ‘Vegan Sausage, Bean & Cheeze Melt’, the ‘Vegan Ham & Cheeze Baguette’ and a vegan-friendly breakfast sausage.
Still, the company also warned it has not been immune to staffing and supply chain pressures and said there has been some disruption to the availability of labour and supply of ingredients and products in recent months.
“Food input inflation pressures are also increasing; whilst we have short-term protection as a result of our forward buying positions we expect costs to increase towards the end of 2021 and into 2022,” it said.
“Operational cost control has been good and the strong sales performance in the third quarter gives us confidence as we move into the autumn. Subject to any unexpected Covid disruption we expect the full year outcome to be ahead of our previous expectations.”
Greggs also said on Tuesday that it was lifting its new store target to around 150 a year from 2022, from 100 currently.
