Sales growth has improved at high street bakery chain Greggs in recent weeks but consumers remain cautious, boss Roisin Currie has said.
The pasty, sandwich and sweet treats seller reported a 7.4% lift in sales to £784m across the first 20 weeks of the year, with 2.9% like-for-like sales growth compared with the same period last year. Better trading conditions over the last 11 weeks had given rise to improved performance, the retailer said.
Bad weather in January and customer worries about the cost of living had been blamed for a disappointing 1.7% growth in like-for-like sales across the first nine weeks of the year. Despite the more pleasing recent results, Greggs said the market continued to be challenging and volumes were slightly down though improving.
Ms Currie said data pointed to growth in consumer disposable income and that it would shortly see the positive impact of a rise in the National Living Wage, which has so far been in one pay packet.
But despite the additional spending power, consumer sentiment has continued to fall. She said: "What we've said previously is it looks like the consumer is saving and not spending even though they have got more money in their pockets."
Ms Currie added: "Because we've had settled weather and sunny weather, that does encourage people to come out of home more, and you've seen that in some of the clothing retailers and some of the numbers they've talked about show that early Spring has got people out and about shopping in on the high street. Therefore, we benefit.
"When people are out and about, we're well placed to make sure that we can serve on the breakfast and lunch or the evening day part. I think we still remain cautious."
Amid efforts to get to more than 3,000 shops in the º£½ÇÊÓƵ, the brand opened 66 new locations during the period including 15 with franchise partners and four new drive-thrus - including its first in Northern Ireland at Craigavon. Meanwhile 46 shops were closed, including 21 relocations, with those closures weighted to the first half of the year.
The activity meant Greggs had a total of 2,638 shops trading at May 17 - including 2,077 company-managed locations and 561 franchised units - and is still on track for net openings of between 140-150 this year.
Growth was supported by new products, including an over-ice drinks with new flavours peach iced tea and mint lemonade and pizza boxes generated strong demand alongside other hot food items such as southern fried chicken goujons, southern fried potato wedges, and a new mac and cheese.
A made-to-order range of chicken burgers, wraps and fish finger sandwiches is now available in more than 300 shops following a trial last year. Those products are the result of Greggs looking to increase its evening trade - particularly between 4pm-7pm - with the menu items also said to be performing well at lunchtime.
Bosses also highlighted recipe changes to the chain's sandwich range, and the launch of a new feta, red pepper and spinach bake.
New healthier choices were introduced to shelves, including fat-free Greek style yoghurt and strawberry compote.
In its trading update to the London Stock Exchange, Greggs said: "The improved like-for-like sales performance has been delivered in what remains a challenging market context, and during a period that compares with our strongest performance in 2024.
"Our investment programme is on track and there has been no change to the outlook for cost inflation, which we expect to be around 6% on a like-for-like basis.
"Our plans for managing the inflationary headwinds are progressing well and, whilst early in the financial year, the board's expectations for the full year outcome remain unchanged."
