British bakery chain Greggs is poised to open a further 150 more stores, a move deemed controversial by some, as the chain faces rising energy and staff costs.
The announcement of 150 more stores will bring its total to almost 3000 stores in the UK. According to figures released by the company, its annual sales increased by 23% in 2022, to UK£1.5 billion, compared with £1.2 billion the previous year.
According to Greggs, its decision to trade after 8pm or later has significantly boosted earnings for the year, marking 500 shops that are now open after its usual 6pm closing time. In 2022, the chain opened 186 shops alone, growing the figure to 2328 shops.
However, this comes at a time when food and packaging costs have increased significantly, due to Russia’s invasion of Ukraine in February 2022. This has also had a knock-on effect on energy prices, as a combination of the war in Ukraine and increased demand after the pandemic have driven them up. Government support to help businesses with skyrocketing energy prices will stop from the end of March, 2023.
“Greggs has been on more of a roll after January’s trading statement pointed to a strong end to the year in terms of sales,” said Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown, who told business newspaper City A.M. “As the cost-of-living crisis rumbles on, consumers are showing a big appetite for Gregg’s ranges with offer the crucial ingredient in cash-strapped times – value.”
“Management’s tinkering to improve the recipe for success by lengthening opening hours, increasing online orders and rewarding customer loyalty via the app have all been paying off,” she added, referring to the use of the Greggs App, which rewards customers for loyalty by offering free products across their entire range.
In Greggs’ fourth quarterly report, Chief Executive Roisin Currie said she was “proud” of progress made during such a challenging time.
“We enter 2023 in a strong financial position that will enable us to invest in shops and supply chain capacity to bring Greggs to even more customers across the UK. While market conditions in 2023 will remain challenging, our value–for–money offer of freshly–prepared food and drink is highly relevant as consumers look to manage their budgets without compromising on quality and taste,” Roisin said.
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