Greggs has made a big deal out of its transformation from an artery clogging bakery chain to a mid-market sandwich maker, but it seems investors are beginning to lose their appetite for its posh nosh.
The food retailer reported a pretty scrumptious 5.2% jump in sales in the year to January 2 this morning, including a 4.7% boost from stores open more than a year – a performance chief executive Roger Whiteside described as ‘another excellent year of progress.’
The company said it expects full-year profits to be in line with previous expectations, but its investors were clearly hungry for more. Greggs shares plunged around 9% this morning to 1,114p, their lowest level since October.
Regardless of what investors think, it seems Whiteside is undeterred from his strategy of pursuing time-poor workers on the hunt for breakfast and lunch on-the-go. The company has spent the last year refitting 202 of its shops (as well as opening a net 48 new ones) and launching new products, including salads and soups.
Greggs has been particularly proud of its coffee sales, which have increased after it started selling ‘proper’ espresso based brews similar to those of Starbucks and Costa. Its latest wheeze is the hipster favourite ‘flat white’, which apparently consists of a small amount of ‘microfoam’ milk poured over a shot of espresso.
We’ll have to wait and see whether that proves to be a hit with customers, but for now it seems investors have been left with little more than a bitter taste in the mouth.