Greggs has reported surging sales this autumn while making no changes to its cost inflation outlook for the year.
The sausage roll specialist said on Tuesday that total sales were up 14.6 per cent for the 13 weeks to 1 October 2022, compared to the same period in 2021.
Price increases of around five pence were introduced on some products, including its flagship sausage rolls, this week. The beloved baked good now costs £1.15.
The hot food connoisseur said it had been trading well in an environment “where cost pressures are significant.”
Speaking to reporters on Tuesday morning, CEO Roisin Currie said the chain had “no evidence” that customers had been trading down but she hoped they had been.
There had been no “significant change” in customer behaviour amid the cost of living crunch, Currie said. However, she cautioned that changes may be hidden by behaviour still recovering from the pandemic.
Currie, who took on the reins at Greggs over the summer, said the chain believes it has seen a return of “snacking customers”, who are picking up coffee or baked goods when “out and about.”
After an especially strong staycation boost to sales in 2021, year-on-year growth had “moderated” in August as anticipated, the bakery chain said in its third quarter trading update.
However, “momentum returned” in September, with the chain’s store closure on 19 September for the Queen’s funeral resulting in a hit of one percentage point to like for like sales growth.
Cost inflation was still expected to be around nine per cent in 2022, Greggs said, with the London-listed firm now holding “an appropriate level of forward purchasing cover” for key food and energy commodities for the fourth quarter.
While there was still “considerable uncertainty in the economy as a whole,” Greggs said it was trading in line with expectations and anticipated the full year outcome to meet anticipated targets too.
Some 90 net new shops opened in the year to date, with the brand anticipating around 150 openings in total this year.
Greggs’ share price was buoyed ten per cent in trading on Tuesday morning.
The “pastry powerhouse” has “a significant advantage over its pricier competitors like Pret” with the third quarter trading update showing “no shakeup to the first half’s momentum,” according to Julie Palmer, partner at Begbies Traynor.
In half-year results in August, Greggs posted pre-tax profit of £55.8m, up just slightly from the £55.5m posted in the first half of 2021.
The bakery chain said this was reflective of the re-introduction of business rates, an increase in VAT and higher levels of cost inflation.
Greggs has previously also vowed not to shrink the size of its products, with a top executive saying that customers would find shrinkflation of their favourite treats “dishonest”.
Customers would be quick to call out the company for switching to cheaper ingredients or making products smaller, finance director Richard Hutton told CityA.M. in August.
Instead, prices would reflect the heightened cost of operations and ingredients.
“We aren’t going to be cutting the end off a sausage roll,” he added.
Household names have announced ‘shrinkflation’ measures in recent months, including Cadbury which downsized its Dairy Milk sharing by 10 per cent to combat rising costs.