Greggs Reading store

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Revenues at Greggs have soared as the high street bakery chain opened a record number of new shops in 2022.

The group opened 186 sites last year to take its portfolio to 2,328 shops and is targeting another 150 openings in 2023.

Total sales in the year ended 31 December 2022 rose 23% to £1.5bn, while like-for-like sales in company-managed shops increased 17.8% year on year.

Pre-tax profits increased 1.9% to £148.3m thanks to the top-line growth despite inflationary pressures.

CEO Roisin Currie said 2022 had been “a year of strong progress” for Greggs.

“We have an exciting, ambitious plan for the years ahead and, by continuing to nurture what makes Greggs special, I believe we are extremely well-placed to realise the opportunity to become a significantly larger, multi-channel business,” she added.

Greggs is one year into a five-year plan to double sales and said today that there was a “clear opportunity” to operate more than 3,000 shops across the UK.

Like-for-like sales in company-managed shops increased 18.8% in the first nine weeks of 2023, in line with expectations.

Currie said cost inflation would continue to be a challenge in the year ahead, driven particularly by pay and energy costs, but she added the group was confident that the “outstanding value proposition” would remain compelling as customers looked to make their money go further.

Greggs announced a final dividend of 44p a share, taking the total ordinary dividend per share to 59p for the year.

Shares in the group opened down 0.7% to 2,731.4p as investors worried about the ongoing challenge of rising costs.

Morning update

Volumes have tumbled at supermarkets as rocketing prices led customers to buy less in February, according to the latest data from NielsenIQ.

Total till grocery sales increased 11.1% in the past four weeks ended 25 February, up from 7.6% recorded in January.

However, the rise was below the 14.5% level of inflation recorded by Nielsen last month.

Volumes at the mults fell by 4.1% in the four-week period as shoppers employ varying coping strategies to combat higher prices, including trading down to private label.

While volumes are down compared to the same period in 2022, they are broadly unchanged over the past 12 weeks (-4%).

Discounters Aldi (+25.6%) and Lidl (+21.1%) continued to gain market share in the month, while convenience store value sales grew by 8% with volume up 1.4%.

“Discounters sales continue to accelerate and we currently have the fastest growth in this channel over the last decade,” said Mike Watkins, NIQ UK head of retailer and business insight.

“With food and drink inflation not expected to slow just yet and shoppers paying more for all essential items (including their energy bills) we can expect lower prices - in particular supermarkets’ own label ranges - to be the key messaging from all retailers over the next four to six months.”

Nielsen said fruit and veg shortages had also weighed on sales growth in Feburary, with total value sales in the fresh produce category up just 1.1%, with a unit decline of 5.4%.

Supermarkets struggled to meet demand for certain products, such as tomatoes, where unit sales declined by -17.6%, with vine tomatoes worse hit, down -28.9%, and peppers down -16.8%. However, value sales for products that were available such as lettuce (13.7%) and cucumber (31.8%) increased despite limited availability.

Premier Foods has issued a surprise profits upgrade this morning as sales momentum continued into its final quarter of the financial year.

The group behind Mr Kipling, Bisto and Batchelors said it now expected revenue growth in Q4 to be at least 10% ahead of the previous year as the grocery division made further market share gains and sweet treats demonstrated improving trends.

As a result, trading profits and adjusted pre-tax profits are forecast to be ahead of the board’s expectations at about £155m and £135m respectively.

Shares in the group soared 9% to 125.4p as markets opened.

Carlsberg CEO Cees ’t Hart is retiring from the Danish brewing giant after eight years at the helm.

He will leave the group at the end of September, with a search for his sucessor ongoing.

Carlsberg chairman said Hart had delivered “remarkable results” during his time at Carlsberg. “Cees has been a catalyst for performance, achieving excellent results, and a true leader, ensuring the successful strategic transformation of the Carlsberg Group,” he added.

Hart said: “It has been a privilege leading Carlsberg the past eight years. I’m immensely proud of the organisation and the results we as a team have achieved.”

He added: “Staying on board for another half a year will allow me and the team to continue delivering on our challenging plans for 2023 and accomplishing the sale of the Russian business before the summer. Thereafter, I’ll focus on some interesting non-executive roles.”

Food sales increased 8.3% in February as volumes tumbled on surging grocery prices, according to the latest BRC-KPMG retail sales monitor.

Total UK retail sales rose 5.2% last month, down from 6.7% growth a year ago, with non-food sales up 3.2%.

Over the three months to February, instore non-food sales increased 8.1%, while online non-food sales fell 3.1%.

Paul Martin, UK head of retail at KPMG, said: “With overall inflation running at around 10%, and food inflation sitting nearer 20%, total sales growth for February of just 5% will be eating hard into retail margins and masking the true state of the sector’s health.

He added: “consumers will continue to take steps to reduce spend where they can - switching where they shop, what they buy, whilst also cutting back on activities, such as eating out and takeaways. As much of the growth in retail is being driven by inflation, price and promotional strategies have become increasingly important growth engines for retailers.”

IGD CEO Susan Barratt said: “Food and drink sales, driven by historically high levels of inflation, grew in February and we’re seeing little sign of food inflation abating yet in 2023. Volume sales continued to decline and events like Valentine’s Day are failing to make a positive impact.

“Despite energy prices beginning to fall, the fact that food inflation remains stubbornly high means consumers’ trust and confidence is declining. With food supply chains challenged for fruit and vegetables, food availability concerns among shoppers remain high and fewer shoppers trust the food industry to ensure good availability (61% compared to 70% Feb ’22).”

Growth in supermarket spending tapered off last month despite soaring food price inflation as shoppers sought out ways to reduce the cost of their weekly shop, according to the latest Barclays spending report.

Data from Barclays, which sees nearly half of the nation’s credit and debit card transactions, revealed that spending on groceries increased just 6.6% in February - well below inflation - as almost seven in ten Brits said they were looking for ways to reduce the cost of their weekly shop.

Almost half of these shoppers are cutting down on luxuries or one-off treats for themselves (49%), while a similar proportion are buying more budget/value ranges (48%) and making a shopping list so they only buy what they need (46%).

Of those trying to cut costs, a third (34%) are shopping at multiple supermarkets to source a range of deals, and three in ten are shopping in larger supermarkets because they tend to have lower prices than smaller stores.

Food shortages are also influencing grocery shopping habits, with one in two noticing that some shelves in supermarkets are considerably emptier than normal. More than a third found they are less able to buy the items they need because of these shortages, while a similar proportion (33%) has seen supermarkets restrict the amount of certain items they can buy.

Overall consumer card spending grew 5.9% year-on-year in February.

“The recent fruit and veg shortages are forcing Brits to consider alternatives for their weekly shop, as they continue to look for savvy ways to offset rising food price inflation,” said Barclays director Esme Harwood.

“Popular trends this month include buying ‘dupes’ of popular products, shopping at discount stores and limiting Easter spending.”

Logistics firm Wincanton has issued a profits warning after losing a contract with HMRC to support UK customs arrangements at inland border facilities.

The group said it was “extremely disappointed” to lose the business.

It added that it also continued to expect “a more challenging external environment” in the coming financial year, including an accelerated reduction in consumer spending and customer volumes.

As a result, it forecast pre-tax profits would be materially lower then current market consensus in the 2024 financial year.

Wincanton added it continued to trade in line for the current financial year ended 31 March 2023, with revenue growth of about 3% and pre-tax profits up more than 5%.

Shares sank 25% to 230p on the profits warning.

Revenues at HelloFresh hit a new record of €7.6bn in 2022 as it shipped more than one-billion meals to customers.

The group said customers showed “consistent high engagement” with average order values rising by 10%.

Total sales increased 27% in the full year and by 19% in Q4, while adjusted EBITDA reached €477.4m with a margin of 6.3%.

“2022 presented us with a whole new set of challenges that our teams worked very hard on to tackle,” said co-founder and CEO Dominik Richter. “While we continue to face a difficult macro environment, we still posted healthy growth rates and maintained strong levels of profitability.

“We also successfully managed to relentlessly mitigate inflationary pressures and ensure that our prices remain competitive compared to grocery stores.”

However, shares fell 4.8% to €21.64 as markets opened after the group forecast sales growth of between 2% and 10%.

Lindt & Sprüngli has reported a 10.8% increase in organic sales to CHF 5bn in 2022 thanks to increased footfall in its shops and in travel outlets.

Operating profits rose 15.5% to CHF 744.6m, which the Swiss chocolatier said was down to improvements in the supply chain in North America.

The FTSE 100 opened 0.2% higher to 7,942.75pts.

Other than big rises for Premier Foods, other early winners included Naked Wines, up 3.4% to 110.8p, THG, up 2.4% to 74.7p, Glanbia, up 2.1% to €13.17, and Hilton Food Group, up 1.8% to 733p.

Early fallers alongside HelloFresh included Coca-Cola HBC, down 1.9% to 2,134p, and Bakkavor, down 1.8% to 107.6p.

Yesterday in the City

The FTSE 100 fell back 0.3% to 7,925.61pts as a new week got under way.

There wasn’t much market news to influence shares yesterday, but risers included THG, up 7.4% to 72.5p, HelloFresh, up 5.3% to €22.80, and Greggs, up 0.9% to 2,740.4p.

Science in Sport and Ocado were among the losers, down 8.5% to 13.5p and 3.2% to 532.4p respectively.