Greggs has responded to the tighter market with meal-deal promotions and introduced breakfast rolls in February - bacon or sausage in a fresh, Greggs-baked roll - and have now sold 4.5 million, helping to grow sales in the traditionally quieter early morning period. This helped lift sales 2.9% to £321 million (LFL sales 0.7% up).
Greggs have improved margins by 0.5% to 5.7% from last year so that pre-tax profit increased 12.3% to £18.6 million.The new bakery in Newcastle upon Tyne is now in production and will replace the old Gosforth bakery progressively.
Total capital expenditure during the first half was £12.4 million (2009: £10.4 million), reflecting the increased rate of shop openings and refurbishments and these will gather pace in H2. Alongside this Greggs will be conducting the first phase of investment in it's supply chain to support the growth in shop numbers, by a further 600+ units. Greggs total capital expenditure for the year will be £45-50 million (2009: £30.3 million), which will be financed from their strong cash flow.