Greggs CEO: ‘Popularity’ of brand has boosted sales as inflationary pricing is eased

Greggs achieved “strong” like-for-like sales in its final quarter of 2023, reporting more transactions as the impact of inflation-driven price increases wanes.

GreggsGreggs has attributed its “strong” like-for-like sales growth to the popularity of its brand, as its pricing normalises following inflation in recent times.

Greggs saw like-for-like sales increase by 13.7% in 2023 versus the year prior. The bakery business reported that, as the year went on, it saw less contribution from pricing inflation (i.e. increased prices) towards this sales growth.

In particular, the fourth quarter saw “continued growth in transaction numbers and reduced contribution from price inflation”, according to the company. Like-for-like sales increased 9.4% in the fourth quarter, versus the same period in 2022.

“Our strong like-for-like sales performance demonstrates the popularity of the Greggs brand,” CEO Roisin Currie told investors today (10 January).

Figures from YouGov’s BrandIndex platform shows that Greggs’ index score, which is a measure of overall brand health, has risen from an average of 25.4 last year, to an average of 26.2 this year (ended 9 January 2024).

In March last year, Currie claimed Greggs’ brand health was at an ‘all-time high’ in 2022, according to BrandIndex it appears to have improved beyond that since.

Greggs claims brand health at an ‘all-time high’

Greggs’ buzz metric, which is a measure of whether respondents have heard positive things about the brand, has also improved, up to 12.8 versus 11.6 last year.

While the company has indicated that the impact of its inflationary pricing is now easing, it appears that increased prices did have some impact on consumers’ values perceptions of the brand in the last year, as the measure declined slightly from 37.7 last year to 37.2 this year. On the other hand, its quality perceptions have improved in the last year, at 18.7 versus 18.1 in the previous period.

Currie attributed the popularity of the brand to the company developing its range, and increased availability through digital and extended opening hours, things which have been ongoing focuses for the brand.

By the end of 2023, 710 of Greggs shops were on the Uber Eats platform, available for consumers to order delivery. The brand also continued its delivery partnership with Just Eat.

Last year, the brand opened 220 new shops and closed 75 (33 complete closures and 42 relocations). This is aimed at “giving customers more convenient access to Greggs”.

Greggs doubles down on digital and evening trading following profit boost

The brand highlighted its confidence that it can deliver “good progress” this year. It did highlight wage inflation as a challenge in 2024.

The minimum wage will increase to £11.44 for workers over 21 from April this year, it is currently set at £10.42 per hour for workers over 23, and to £10.18 per hour for workers aged 21 to 22. Greggs reports it does pay all of its workers above the current national minimum wage, regardless of age.

While Greggs highlighted wage inflation as a potential challenge, it stated that “higher rates of pay across the economy will also provide support to consumer incomes”.

With recent figures from Hospitality Data Insights finding that £2 in every £100 spent in UK bricks-and-mortar hospitality is spent in a Greggs shop, the brand will be hoping an increase in consumer income means more sales for it.