Greggs Plc, the bakers with 1571 high street outlets across Great Britain, has reported FY2011 LFL sales up 1.4%. But, having added 84 new shops overall, sales have increased by 5.8% to £701 million.
Despite having to contend with a steady increase in commodity prices, Greggs has increased pre-tax profits by 15.2% to £60.5 million (2010: £52.5 million).
During the year Greggs closed its old bakeries in Penrith and Newcastle and moved to new business premises at each location, a £16.5 million investment being made in Newcastle and £4.5 million in a specialist confectionery facility at Penrith, as part of an overall £59 million investment in new shops, refits etc.
Greggs has been able to grow its business nationally simply by opening more shops, and it plans to continue with an accelerated rate of new openings. But it has also tapped into a new channel by starting to wholesale its products to Iceland, starting with frozen sausage rolls.
Greggs has been innovating with new formats: at petrol stations, motorway services, railway stations (known as "Food on the Go"), and large format coffee shops (known as Greggs Moment) with a full bakery offer. It has also supplied its first franchised outlet.
This year, Greggs is putting in a new small bakery in Norwich to support its expansion into East Anglia. But Greggs is feeling the pressure consumers are under and LFL sales in the first 10 weeks of 2012 are down 1.8%, though total sales will surely benefit by the addition of 90 new shops to its commercial property portfolio.
Greggs' confidence is displayed by an increased final dividend of 13.5 pence per share, making a total dividend for the year of 19.3 pence (2010: 18.2 pence). Shares in the firm closed last night at 558p, valuing the business at £564 million.