Food-to-go retailer Greggs (GRG) has raised earnings guidance again after serving up a tasty recovery in first half trading with sales matching their pre-pandemic level of £546 million and underlying profits rising more than 30% on their level of two years ago to £55.5 million.

As well as being able to reopen existing stores, the value sandwiches-to-vegan sausage rolls purveyor is pushing ahead with new store openings and restarting dividends cancelled due to the pandemic, although the shares softened 0.7% to £27.85 following a stunning run.


For the half ended 3 July 2021, like-for-like sales in company-managed shops measured on a two-year basis were just 9.2% below the equivalent pre-pandemic period in 2019.

Encouragingly, second quarter sales exceeded management expectations as the reopening of non-essential retail boosted footfall, with Greggs delivering 2.8% like-for-like sales growth versus the second quarter of 2019.

In the most recent four weeks to 31 July, two-year like-for-like sales were 0.4% above the equivalent period of 2019.

While footfall to its shops remains lower than pre-pandemic, customers who do visit are spending more and Greggs also has a thriving delivery service to keep the tills ringing.

‘Greggs once again showed its resilience in a challenging first half, emerging from the lockdown months in a strong position and rebuilding sales as social restrictions were progressively relaxed,’ explained CEO Roger Whiteside.

‘Whilst there continue to be general uncertainties in the market, given our recent performance we now expect full year profit to be slightly ahead of our previous expectation.’


In a show of confidence, Greggs reinstated the dividend by declaring a 15p payout for the half and has also restarted new product development following a temporary suspension due to Covid.

Recent launches include a ‘Vegan Ham & Cheeze Baguette’ and a vegan-friendly breakfast sausage, while its latest line, the ‘Vegan Sausage, Bean & Cheeze Melt’, hits the shelves this week.


Russ Mould, investment director at AJ Bell, commented: ‘More people back working in the office should play well to Greggs as that should drive more traffic to its stores at lunchtime and for coffee breaks in the morning and afternoon.

‘Equally, expansion of its car-based sites including drive-through stores is well timed given how many people have stuck to their own four wheels rather than use public transport since the pandemic began.’

Mould added: ‘Greggs is reaping the benefits of having built up a good reputation for quality products at affordable prices. As economic activity picks up, its brand strength should see it act as a magnet for hungry individuals.

‘It’s also gone down to the classic route of having a loyalty scheme with rewards, another way of helping to attract repeat business from customers.

‘For what is essentially a business selling basic hot drinks and flaky pastry-based snacks, Greggs is very innovative in terms of the way the business is run and finding opportunities to grow. It truly is a great British retail champion.’


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Issue Date: 03 Aug 2021