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Greggs posted growth of 14.6% in its third quarter as it continues to grow its store estate, but cautioned over the impact of economic uncertainty and significant cost inflation.

The chain’s total sales were 14.6% for the 13 weeks to 1 October 2022, with sales in company-managed shops rising by 9.7% when compared with the same period in 2021.

It said year-on-year growth moderated in August given the particularly strong ‘staycation’ effect seen in 2021, however, momentum returned in September despite the closure of its estate on 19 September for the funeral of Queen Elizabeth II which impacted growth by around one percentage point.

In the year to date the chain has opened 106 new shops and closed 16 shops, giving a total of 2,271 shops trading at 1 October 2022 (comprising 1,860 company-managed shops and 411 franchised units).

For the year as a whole, Greggs continues to expect around 150 net openings, of which around 40% are planned to be with franchise partners.

In September the group commissioned a new automated pizza manufacturing line at our Enfield site. Product quality is “excellent”, Greggs said, and will support further growth in this important category as well as lowering production costs.

It continues to work on options for development of further capacity to support its growth ambitions. Some of the planned 2022 costs associated with this work are now likely to move into 2023 and, as such, it now expect capital expenditure in 2022 to be around £120m (previously expected to be £170m) with the difference being deferred to 2023.

For the rest of the year, Greggs said that cost inflation would likely come in at 9% for 2022 and it now holds an appropriate level of forward purchasing cover for its fourth quarter requirements for key food and energy commodities.

It also holds significant energy cover for the first quarter of 2023, with average costs expected to be below the level of the recently-announced price cap.

“Greggs continues to trade well in an environment where cost pressures are significant and our outstanding value-for-money positioning is ever-more important to consumers,” it said.

“There remains considerable uncertainty in the economy as a whole but we continue to trade in line with our plan and currently expect the full year outcome to be in line with our previous expectations.”

Greggs shares have jumped 9.2% this morning on the strong growth to 1,881.6p.

Morning update

The FTSE 100 has had a strong start to the day’s trading, up 1.2% back to up 6,988.8pts.

Early risers, along with Greggs, include Ocado, up 4.7% to 487.6p, FeverTree, up 4.1% to 879.5p and SSP Group, up 4.1% to 196p.

The few fallers include Premier Foods, down 1.7% to 94.1p and Glanbia, down 1.4% to €11.63.

Yesterday in the City

The FTSE 100 opened the week up 0.2% to close at 6,908.7pts yesterday.

Risers yesterday included Bakkavor, up 5% to 94.5p, Deliveroo, up 4.7% to 88.8p, B&M European Value Retail, up 3.7% to 317.3p, Pets at Home, up 3.6% to 273.4p, Finsbury Food Group, up 2.6% to 81p, Hilton Food Group, up 2.2% to 547p and Devro, up 2.2% to 169.6p.

Fallers included Just Eat, down 7.1% to 1,324.2p, Naked Wines, down 4.6% to 80.1p, THG, down 3.1% to 36.6p, Science in Sport, down 3% to 16p, Haleon, down 3% to 270.8p, Hotel Chocolat, down 2.5% to 117.5p and Daigeo, down 2.4% to 3,707.5p.