To be fair, it wasn’t just the breakfast rolls that were flying off the shelves: coffee was another big seller (possibly something to do with the fact that Greggs's coffee is 40% cheaper than some of its rivals). All told, sales were up 2.1% to £662m; like-for-likes were actually pretty flat, up 0.2%, but the company's aggressive expansion - it opened 68 new stores during the period, taking its total to 1,480 - bossted the top line. But shareholders won't be complaining, given that pre-tax profits were up 7.9% to £52.5m. And nor will its 16,800 employees: thanks to Greggs's profit-sharing scheme, they'll share a record £5.8m payout. Nice.
Greggs has apparently started this year well, too, with sales in the 10 weeks to March up by 3.8% - and it expects that to rise, with the opening of another 80 new stores this year. So, with its range of modestly-priced cakes, pastries and sandwiches (not forgetting those ever-dependable pasties), Greggs looks well set to keep growing its top line (as well as our waistlines), despite the likely drop-off in consumer spending.
That said, CEO Ken McMeikan (part of Greggs' surprisingly heavyweight management team) pointed out that with rising wheat prices to deal with, even Greggs will still feel the squeeze. This year, the retail environment is going to be ‘challenging’ no matter where you’re coming from, he said.
French Connection would certainly echo that; the fashion retailer (and creator of incomprehensible ‘This is the man/woman’ ad campaign) said this morning that although it made a pre-tax profit of £7.3m last year, 2011 is likely to be tough thanks to a combination of falling consumer confidence and rising cotton prices. It was a similar story at department store Debenhams, which expects to push prices up by 6%-8% in response to higher input costs.
This year will be tough for everyone on the high street. But for the time being, Greggs certainly seems to be on a (breakfast) roll.