Greggs sees annual profits soar

Around 25,000 Greggs workers will share £17.6 million in bonuses this month after the high street bakery chain notched up a 27% hike in annual profits.

The group’s boss, Roisin Currie, said the staff will be given the bonus in their pay packets at the end of March to recognise their “hard work and effort” over 2023.

It comes after Greggs delivered a bumper pre-tax profit of £188.3 million for 2023, up from £148.3 million the previous year after like-for-like sales in company-managed shops jumped 13.7%.

On an underlying basis, pre-tax profits lifted 13.1% to £167.7 million.

Greggs – which employs 32,000 people in total – shares out 10% of profits each year with staff who have worked for the firm for at least six months.

It also delivered some cheer for shareholders, with a special dividend payout of 40p a share, on top of a 46p a share final dividend.

Ms Currie told the PA news agency the group was hoping its value offering would stand it in good stead this year and reiterated that she did not plan to increase prices over 2024.

But she added that Greggs was “not complacent” about tough high street trading conditions.

She said: “The consumer is still under pressure in terms of their disposable income.

“We’re certainly not complacent.

“Retaining that number one for value is very important to us.”

She said there may be a bounce in consumer confidence and spending after the national living wage is increased nationwide in April.

“That might well put more money into the pocket of the consumer,” she said.

Ms Currie called on Chancellor Jeremy Hunt to help cash-strapped shoppers in his Spring Budget on Wednesday and “put money in consumer pockets”.

The firm’s annual results showed slowing sales growth as there was less contribution from price inflation, paring back to 9.4% in the final three months of the year.

The group added that comparable store sales growth has slowed further, to 8.2% in the first nine weeks of 2024, though it said this reflected good growth by volume.

The firm said it was “confident that Greggs can deliver another year of good progress” and remains on track to open between 140 to 160 shops this year after opening a record 220 sites in 2023.

It added: “Inflationary pressures are reducing and we have improved visibility of costs in the coming year.

“There is no change to management’s expectations for 2024.”

The group said it expects its own cost inflation to be between 4% and 5% but cautioned this was “subject to geopolitical risks”.

It said it was on track with plans set in 2021 to double sales over five years, adding that “what started as a plan is now a solid reality”.

Shares in the firm lifted 4% on Tuesday morning.

Russ Mould, investment director at AJ Bell, said: “This drive to be the food-on-the-go king is paying off, with Greggs’ market share at an all-time high and the business has now grabbed the top spot for breakfast.”

He added: “The pace of growth actually slowed each quarter during the past year, albeit still delivering the kind of success most companies can only dream of.

“February was a washout month for all retailers due to the bad weather and that might explain the reduced growth reported by Greggs.”

Published: 05/03/2024 by Radio NewsHub