Greggs Plans Significant Store Expansion Amid Sales Growth
The bakery chain aims to open 100 new locations this year and over 700 in the long term, supported by strong first-half sales and menu innovation.
Greggs is targeting the opening of 100 new stores this year, a slight adjustment from its previous goal of 120, as part of a longer-term ambition to add over 700 more locations to its estate. The company currently operates 2,773 shops and aims to reach a total of 3,500.
This expansion is being supported by investment in distribution centers and a strategic focus on convenient locations. Over half of the new store openings in the first half of the year were situated in areas such as petrol forecourts, supermarkets, retail parks, hospitals, and university campuses. The company also opened its first international travel hub shop in Tenerife South Airport and plans further expansion in major transport hubs.
Greggs reported a 7.2 percent increase in sales, reaching £1.1 billion in the first half of the year, boosted by the 34 new stores opened during this period and a refreshed menu. Like-for-like growth at company-managed shops was 2.1 percent, while franchised stores saw a 1.3 percent increase.
Pre-tax profit for the first half of the year rose by 20 percent to £76 million. The company attributed sales growth, in part, to new menu items, including a popular chicken roll and matcha drinks, which have helped attract new customers. Greggs has also noted a reduction in the outlook for cost inflation to 2.2 percent for the year, though some uncertainty remains.
Despite these positive results, the company cautioned that increased supply-chain capacity might lead to a year-on-year decrease in second-half profits if the consumer economic environment does not improve. Greggs is also trialing 10 new Greggs Express shops, featuring self-service coffee and food.
In response to the company's expansion plans and financial performance, Greggs shares saw a significant surge, rising 11.54 percent to 1,885.00 pence on Wednesday morning. This marks a 20 percent increase in share value over the past year. Analysts suggest this rally reflects renewed consumer interest and the company's ability to find cost savings to support its ambitious growth targets.