Greggs bakeries rising nicely
Releasing its 2010 preliminary results, the firm said the closure of its existing Newcastle bakery – when it moves to the new 80,000sq ft facility in the city district of Longbenton – may mean a £1m one-off charge.
Chief executive Kennedy McMeikan said the firm began building a confectionery centre of excellence in Penrith late last year (due to open in September 2011); Greggs also has planning permission for a new Wiltshire bakery to support Southwest growth.
2010 sales (ending January 1 2011) hit £662m, up 2.1% on 2009, with like-for-like sales increasing 0.2%; despite “tough trading conditions” and winter snow, total sales increased 0.6% from £658m the previous year and pre-tax profits were £52.5m.
Focusing on supply chain efficiency, Greggs said it increased the number of shops it supplies from existing bakeries throughout 2010, in line with a five-year plan begun in 2009 to reduce supply costs by £10m.
The firm said that consolidating manufacturing sites into ‘centres of excellence’ and investing in more efficient processes delivered savings of £1.4 million in 2010, ahead of its original targets for the year.
‘You’ve gotta roll with it…’
Rolls sold as part of promotional breakfast meal deals (including tea or coffee) were proving particularly popular, said Greggs, while it also extended its breakfast range over the last 12 months to include porridge, croissants, pain au chocolat, smoothies and bacon wraps.
Strong growth in hot drinks saw higher sales of freshly ground Fairtrade coffee, which is currently sold in 1,100 shops and is being rolled-out in more throughout 2011, at prices the firm claims are 40% lower than some branded coffee outlets.
McMeikan said: “Whilst UK consumers continue to experience a very testing climate, one certainty is that they will increasingly seek out great value.”
He added:“In addition to the total sales growth I believe marginally positive like-for-like growth during the year is achievable. Performance in the year to date is in line with our expectations, with total sales for the 10 weeks ended March 12 2011 increasing by 3.8 per cent, including like-for-like sales of 0.4 per cent.”
