Greggs sales growth slows in third quarter
Greggs has hailed “very strong” trading in the third quarter but warned that Brexit will put pressure on food and labour costs.
Shares in the high street baker slipped after it also told investors that it expected fewer shop openings by the end of the year than previously forecast.
Like-for-like sales at the retailer rose 7.4% in the 13 weeks to September 28, although this represented a slowdown from the first half of the year.
It said like-for-like sales for the year so far increased by 9.4% as it was boosted by its new autumn menu and offers.
Total sales, which increased by 13.9% in the year so far, were buoyed by 90 new store openings in 2019, while 34 sites were closed during the period.
It said it expected to have 90 net openings, after taking closures into account, by the end of the year, down from its previous forecast of 100 net openings.
Greggs held firm on its financial forecast for the year, but said it is preparing for the potential impact of the UK’s exit from the EU.
The company is “building stocks of key ingredients and equipment that could be affected by disruption to the flow of goods into the UK”, it said.
It added that cost inflation is currently in line with its expectations but said there would be “pressures on both labour and food input costs”.
Greggs said it is progressing with investments in strategic initiatives to “deliver an even stronger customer proposition and further growth in the years ahead”.
In a trading update, the company said it was continuing its trials for evening openings with deals for pizza and hot food after 4pm.
It said it was “encouraged” by customer demand for delivery trials, which it recently started with Just Eat and Deliveroo.