Greggs reported stronger sales in the last few months. This was boosted by the viral success of their new Mac and Cheese and an expansion of menus across thousands of outlets.
After a slow start to 2025, the UK’s biggest bakery chain reported that like-forlike sales increased by 2.9% over the first 20 week period.
The high-street favourite reported that total sales increased 7.4%, to PS784million, thanks both to the performance of existing shops and the opening of 66 new stores.
The update was well received by investors, as shares rose more than 7 percent on Tuesday.
The bakery has now expanded its business to 2,638 locations and stated that it aims to add up 150 new net outlets this year.
It attributed the improved numbers to better weather conditions and an easier trading environment. The company noted that the performance of its first nine weeks was the weakest it had seen since the Pandemic. Like-for-like, sales were up only 1.9%.
This period was affected by both macroeconomic and weather factors.
Jefferies stated that the improvement in like-forlike sales suggests volume pressures have eased, opening up further opportunities for growth by 2025.
Expanding hot food menu and viral Mac and cheese support growth
The company highlights the popularity of their Mac and Cheese on TikTok as a major factor in the sales increase.
Customers have been receptive to other new items on the menu, such as mint lemonade and peach iced-tea, or chicken goujons and fish finger sandwiches.
After a successful test last year, Greggs announced that its hot food made to order range, including wraps and hamburgers, are now available at more than 300 outlets nationwide.
Roisin currie, chief executive of the company’s business unit, said that the expansion of products and the introduction and use click-and collect and delivery services are key to its growth plan.
Currie stated that some older units on the high street are not suitable as we expand our services and offerings.
She confirmed Greggs’ realignment plan, which includes closing some of the smaller shops.
Greggs, despite the good news, noted that the inflation rate remains high. It maintained its forecast for a 6% increase in cost on an like-forlike basis.
It said that its plan to control inflation is progressing, and the company’s full-year outlook remains unchanged.
Should you invest?
The stock is still down 24% on the year despite the rise in the price of the shares.
John Moore, senior investment manager at RBC Brewin Dolphin, said:
The company’s recent price hikes of around 2 percent suggest that it is now trying to “right-size” in response to the National Insurance increase, and recalibrating the rollout of its products.
Dolphin stated that there were tentative signs of progress being made by Greggs in the update today, citing the continued growth of the store portfolio, sales, and the unchanged expectations for the coming year.
The slowing of growth and the question as to whether the UK has reached its ‘peak Greggs,’ will remain a source of concern. The baker has shown its resilience and innovation in bouncing back from difficult times.
Shore Capital analysts Clive Black & Darren Shirley stated that Greggs is still in the midst of a development program for material infrastructure, which includes a manufacturing facility at Derby and a distribution center in Kettering.
Analysts describe Greggs’ as “a high quality company, with an excellent brand, strong management, and a solid infrastructure, asset base, plus a robust financial position”.
Stephen Wright, from The Motley Fool UK, pointed out the “unusually low” expectations that Greggs has at this time.
Wright, however, says that despite the fact the company is showing clear signs of recovery from the disappointing last few months there are other opportunities available at this time.
The stock market is a good place to look for other stocks.
The company has taken steps to reduce the losses caused by shoplifting.
Greggs has also announced that it will take steps to reduce the rising rate of shoplifting.
In some stores, the company is removing drinks and sandwiches from refrigerators that are self-service and placing them on counters.
New security measures include the use of body-worn cameras.
Currie admitted that the thefts in certain areas have resulted in “significant” losses, which prompted the change in store layout as well as additional security investment.
Is it time to invest in this post Greggs Stock Surges as Viral Mac and Cheese and Improved Weather Boost Sales? This post may change as new information becomes available
