Greggs plans to reverse its recent programme of store reductions by expanding its estate away from the high street in 2015 after identifying scope in the market for “well over” 2,000 outlets.
The bakery chain, which currently operates 1,650 stores, is targeting retail and office parks and industrial estates, as well as experimenting with new locations. It has recently opened a branch on the Isle of Wight ferry, trialled concessions in two Spars, and identified sites in Jersey.
“We know there are lots more opportunities to open more shops for Greggs, particularly away from the high street, which we have got pretty well covered,” CEO Roger Whiteside said.
He added the retailer would return to net store growth in 2015 after several years of pruning underperforming shops, with 71 closures last year leading to a net reduction of 21 branches.
The franchise division is viewed as another route to further growth, with 45 shops now in operation at Moto service stations, Euro Garages forecourts and other convenience locations.
Greggs stock is currently riding high after two profit upgrades in a month, with the latest showing a strong finish to the year with sales soaring over Christmas. Whiteside added 2014 had been a record year for profits - now forecast by analysts at about £58m - and sales growth of 4.5% was the best like-for-like performance since 2007.
Meal deals, healthy sandwiches, a new coffee blend and new food lines helped win over customers. Coffee sales peaked at £1m during the week before Christmas, and ‘Balanced Choice’ sarnies with fewer than 400 calories were the biggest contributor in sterling terms to growth, bringing in £55m over the year.
This refocus on the burgeoning food-to-go sector will continue as Greggs aims to refurbish another 200-plus shops to fit in with the new direction. And with more pounds in the pockets of consumers thanks to low fuel prices, Whiteside said the company was going into the new year with “a tail wind behind it” and “a spring in its step.”
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