GRG Greggs Plc

9 January 2025

GREGGS PLC

("Greggs" or the "Company")

Q4 TRADING UPDATE

GOOD PROGRESS AND RECORD £2 BILLION SALES

Q4 highlights

·    Financial year 2024* ("FY24") total sales up 11.3% to £2,014 million (2023: £1,809 million).  Company-managed shop like-for-like** sales up 5.5% for FY24

·    Fourth quarter total sales up 7.7%.  Company-managed shop like-for-like** sales up 2.5% for the fourth quarter, reflecting the more subdued High Street footfall

·    A record 226 new shops opened in the year, with 28 closures and 53 relocations resulting in 145 net new shop openings, in line with our target, and 2,618 shops trading as at 28 December 2024

·    Strong pipeline of opportunities supports plans to continue new shop opening momentum in 2025; in the range of 140 to 150 net openings, including 50 targeted relocations

·    Supply chain capacity development on track, supporting growth plans

·    Planning permission achieved for new National Distribution Centre in Kettering, land purchase completed in January 2025

·    Year-end net cash of £125 million (2023: £195 million)

·    Anticipate full year outcome in line with the Board's previous expectations

* 52 weeks ended 28 December 2024 (2023: 52 weeks ended 30 December 2023)

** Like-for-like (LFL) company-managed shop sales performance against comparable period in 2023

Roisin Currie, Chief Executive commented:

"2024 was another year of good progress by Greggs, with a record number of new shops opened and the £2 billion sales milestone surpassed.  I'm proud of our teams who, day in and day out, do such a fantastic job for our customers.

"We enter 2025 with a strong pipeline of new shop opportunities, and we continue to broaden our menu and enhance our digital capabilities, whilst also developing our supply chain capacity to deliver our growth strategy.  Whilst lower consumer confidence continues to impact High Street footfall and expenditure, our value-for-money offer and the quality of our freshly-prepared food and drink position us well to meet the headwinds we expect to see in the year ahead, and we remain confident in the significant long-term opportunity for growth."

Trading performance

Total sales for FY24 were £2,014 million, an increase of 11.3% compared with 2023, with like-for-like sales in company-managed shops 5.5% higher than those seen in 2023.  Fourth quarter total sales were 7.7% higher than 2023, with like-for-like sales in company-managed shops growing by 2.5%.  Trading performance reflected a well-publicised more challenging market backdrop in the second half of 2024.  Lower consumer confidence impacted High Street footfall and industry-wide visits and expenditure.  Against this challenging backdrop, Greggs maintained its market share of visits, including remaining customers' number one destination for breakfast, and controlled operational costs well. 

We continue to broaden the appeal of Greggs to existing and new customers through a combination of menu development, marketing and extension into new channels and dayparts.  Seasonal lines were in high demand in the fourth quarter, including the iconic Festive Bake, the Vegan Festive Bake and the all-new Festive Flatbread.  These featured alongside our shop-baked Sweet Mince Pies, Christmas Cake Slice and festive hot drinks including the Gingerbread Latte.  Pizza continued to perform strongly during the day and into the evening, with sales of pizza boxes and pizza bundle deals continuing to grow.

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Shop estate and supply chain development

In 2024 we opened a record 226 new shops and closed 81 shops (28 closures and 53 relocations), giving a total of 2,618 shops trading at 28 December 2024 (comprising 2,057 company-managed shops and 561 franchised units).  Our shop openings bring Greggs to new locations, giving customers more convenient access to food and drink on-the-go.  Our relocation activity increases our capacity to serve existing successful catchments. 

Following a rapid roll-out of equipment, our over-ice drinks range is now available in 1,100 shops, exceeding our previous target to make this available in 700 shops by the end of 2024.  The range is popular and we expect to extend its availability further in 2025.

The planned investment in additional supply chain capacity is on track, supporting our ambitious growth plans. Construction of our new frozen product manufacturing and logistics facility in Derby continues at pace.  Following the completion of landlord's works we signed the lease for the Derby site in November 2024 and remain on track to open in 2026 on completion of fit-out and commissioning.  In Kettering, the planning application for our new chilled and ambient National Distribution Centre was approved in Q4 and the land purchase has completed this week.  Construction of the site will commence shortly, with the aim of opening the new site in mid-2027.

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Financial position and outlook

Greggs ended 2024 with a cash position of £125 million (2023: £195 million), reflecting the investment in growth and capacity in 2024 and supporting our plans for the year ahead.  The pipeline of new shop opportunities remains strong, and we expect to open between 140 and 150 net new shops in 2025, including 50 targeted relocations.

Despite growth in disposable incomes, consumer confidence was subdued in the second half of 2024 and this weighed on industry-wide customer visits and expenditure.  With good cost management in the final quarter the Board anticipates reporting a full year outcome for FY24 in line with its previous expectations.

Looking into 2025, employment costs will result in further overall cost inflation, although wage increases should provide support to consumers.  Greggs has demonstrated its ability to mitigate cost inflation in recent years whilst retaining its value leadership, and we are confident we can continue to do so. 

Despite the current headwinds the significant longer-term opportunity for Greggs remains.  We are investing to support our ambitious growth plan and are confident that Greggs can deliver another year of progress in 2025.