British baker and fast food chain Greggs (GRG.L) said on Tuesday it traded well in its latest quarter, with its value offer chiming with consumers against the backdrop of a worsening cost of living squeeze.
Confidence levels among Britain’s consumers sank to a record low last month as they struggle with the accelerating cost of living, even before the government’s mini-budget sowed turmoil in the mortgage market, leading to warnings of a sharp drop in house prices. Wages are failing to keep pace with inflation that was 9.9% in August.
However, Greggs, known for its sausage rolls, steak bakes, vegan snacks and sweet treats, said its total sales rose 14.6% over the 13 weeks to Oct. 1, its fiscal third quarter, with like-for-like sales in company managed shops up 9.7%. Its shares were up 9.4% at 0847 GMT.
“Given all the news just now around cost of living, money in the pocket, customers are looking for great value,” CEO Roisin Currie told Reuters.
“We continue to work hard to shout about the value that we offer in the market,” pointing to an Americano coffee for 1.55 pounds ($1.76).
Currie said Greggs was benefiting from a low average customer spend of just under 4 pounds, the diversified location of its shops and a broadening of its product offer, with more hot food and vegan options.
Faced with higher costs, Greggs has, however, pushed through another round of price rises this week, including for its famous sausage rolls.
The group kept its guidance for full-year cost inflation of about 9% and said it expected the full-year outcome to be in line with its previous expectations.
Greggs said in March it did not expect material profit growth in the current year on the 145.6 million pounds made in 2021 due to the higher cost of raw materials, energy and staff.
This year Greggs has opened a net 90 new shops, taking its total to 2,271. It sees potential for at least 3,000.
It has extended evening trading to 500 shops and expanded a delivery service with Just Eat (TKWY.AS) to 1,230 shops.
($1 = 0.8797 pounds)