Greggs plans to make more dough with major further branch expansion while holding prices

FTSE 250 firm famous for sausage rolls and steak bakes plans to rise branch network but not prices.

Scotland's first drive-thru Greggs, located in a retail park at Eskbank, opened in 2021 - and the firm is eyeing more similar locations. Picture: Lisa Ferguson.

High-street bakery chain Greggs has said that in the year ahead it does not plan to hike prices, and is aiming to open 160 branches as it targets locations outside city centres.

Chief executive Roisin Currie told PA she has "no plans currently" to up prices at the till as it expects a more stable cost base over the year ahead. However, she added that it would be "a long time before we see deflation" that would allow the group to start reducing prices, with retailers among those facing higher wage bills due to increases in the national living wage – although she added that the trend of bigger pay packets is "good news as it puts more money into consumers’ pockets".

Greggs has also revealed plans to debut up to another 160 stores in the year ahead, and cheered a strong end to 2023. The group opened a record 220 new shops over 2023, with 33 closures and 42 relocations, leaving it with 145 new sites on a net basis and taking its total estate to 2,473.

The FTSE 250 firm is to open between 140 and 160 outlets on a net basis in 2024 as it looks to give customers more convenient access to its stores. It will keep looking at expanding across retail parks, travel sites, and roadside locations, plus industrial estates. Currie said: "Where there's any location where you can't currently access a Greggs easily, we want to try and get into that location.”

It also plans to continue rolling out evening opening hours on a targeted basis, with extended hours currently available in around 1,200 of its shops. The firm in a trading update posted a 9.4 per cent rise in like-for-like sales across its own-managed shops in the fourth quarter, a slowdown on the 14.2 per cent growth seen in the previous three months, as Greggs said there was less contribution from price inflation. It saw full-year comparable growth of 13.7 per cent, with total full-year sales up by a fifth to £1.8 billion.

The business also said it continued to see strong demand for vegan options, having recently brought back the vegan steak bake, as well as Christmas ranges, including its festive bake, chocolate orange muffin, and Christmas lunch baguette.

Matt Britzman, equity analyst at Hargreaves Lansdown, said Greggs “can tick off 2023 as a year of real progress” on the back of extended opening hours, more delivery options, improving supply-chain capacity, and “a fresh new suite of tasty treats”. He added: “Festive bakes and chocolate orange muffins lead the way over Christmas, but bears may point to sales growth slowing over the year, and the fourth quarter was the lowest of 2023. That’s largely because Greggs was able to limit price hikes as inflation cooled. Longer-term, that’s a net positive.

"One of Greggs' key strengths is offering a lower-value treat and keeping that proposition intact is key, especially when consumer incomes are stretched. The most important thing is to see volumes trend higher, and that remains the case. The job’s not done. Expect to see more progress over 2024 as investment continues into the digital offering, delivery partnerships and expanding the store estate.”