Strong quarter ends a good year of progress for Greggs.

In its fourth quarter trading update of early January, Greggs, the UK food on the go retailer with around 2,300 retail outlets throughout the country, announced that a strong quarter ended a year of encouraging strategic progress with a robust financial position supporting growth plans.

For the financial year 2022 (52 weeks ended 31 December 2022), total sales were up 23.0% to £1,513m (2021: £1,230m) with like for like sales for the fourth quarter up 18.2% (like for like sales for 2022, as a whole were up 17.8% against the comparable period in 2021). 186 new shops opened in the year and there were 39 closures with 2,328 shops trading as at 31 December 2022.

There had been strong growth in digital and early evening sales, Greggs reported, with a robust cash position to support investment in growth plans, and they anticipate a full year outcome in line with their previous expectations

“I am proud of the progress Greggs made during 2022 in challenging conditions. Our teams did a magnificent job serving customers and managing the growing demand for Greggs products as we expand our shop estate and offer greater availability through digital channels and longer trading hours, whilst continuing to extend our menu to offer more choice,” said chief executive, Roisin Currie.

“We enter 2023 in a strong financial position that will enable us to invest in shops and supply chain capacity to bring Greggs to even more customers across the UK. While market conditions in 2023 will remain challenging, our value-for-money offer of freshly- prepared food and drink is highly relevant as consumers look to manage their budgets without compromising on quality and taste.”

Despite the impact of adverse weather and strikes at the end of 2022, fourth quarter like-for-like sales in company-managed shops grew by 18.2%, reflecting a favourable trading pattern leading into the Christmas period and softer trading conditions in the comparable quarter of 2021 as a result of disruption caused by the omicron variant of coronavirus, Greggs reported.

Seasonal lines were in high demand in the fourth quarter, including their iconic Festive Bake, which featured alongside its vegan-friendly alternative, their shop-baked Sweet Mince Pies and their festive hot drinks including the Salted Caramel Latte, they observed. Plant-based foods are contributing more significantly to their range over time and the introduction of new hot options such as the Vegan Festive Baguette is testament to this trend, they added.

At a time when consumers are increasingly focused on value, they had seen strong growth in use of the Greggs App which rewards customers for their loyalty with free products across their entire range, as well as giving access to features such as Click + Collect, nutritional information and delivery options.

During the year they opened 186 new shops (including 70 franchised units) and closed 39, growing the estate to 2,328 shops as at 31 December 2022, 441 of which are franchised shops operated by their partners. 500 of their shops are now open until 8pm and early-evening is now the fastest growing daypart as they extend availability to both walk-in and delivery customers, they reported.

In the statement, Greggs said that they ended 2022 with a cash position of £191 million, partly reflecting phasing of capex investment, which they have previously described. This will support our plans to invest further in growing both their shop estate and supply chain capacity in the year ahead, say the company. The pipeline of new shop opportunities remains strong and they expect to open around 150 net new stores again in 2023.

Given their strong trading in the year, together with careful cost control, they anticipate reporting a full year outcome for FY22 in line with their previous expectations when they report their preliminary results for 2022 on 7 March 2023.

Additionally, they said that they continue to see material cost inflation in the year ahead. However, whilst consumers are clearly seeing pressures, their value offering remains attractive in the food on the go market and they are confident in delivering another year of good progress in 2023 and remain excited by the significant growth opportunity for Greggs in the years ahead.