Greggs boosted by drive to take slice of rivals' sales

Greggs reported own-store sales grew 4.5 per cent in 2014 as the company successfully targeted more upmarket customers with new, healthier products and revised recipes.

The Newcastle-based bakery chain announced strong Christmas trading on Tuesday, with own-shop like-for-like sales up 8.2 per cent for the five weeks up to January 3 2015, compared with like-for-like sales growth of just 3.1 per cent in the same period last year.

Shares were up 5 per cent in early trading and have risen 58 per cent in the past 12 months.

"Whilst trading conditions and the weather have been helpful, customers have clearly responded well to the improvements we have made to products, our service offer, and the investments we continue to make in the shop environment," said Roger Whiteside, chief executive.

The company's overhaul operation is paying off as it continues to transform stores at a rate of 200 a year from bakeries to food-on-the-go stores, which devote more space to customers.

The company said its "food-on-the-go" product range had performed particularly strongly, with growth in sales of sandwiches, sausage rolls and coffee over the Christmas period.

Greggs' coffee sales have increased since it introduced a new blend last February, with sales peaking at £1m in the week before Christmas. A deal offering coffee and a savoury product for £2 helped to push up sales in the last quarter.

The chain has also been focusing on pushing healthier options as it seeks to steal market share from competitors which are traditionally perceived as more upmarket, such as Pret A Manger, Tesco Express and J Sainsbury. The "Balanced Choice" range - containing less than 400 calories - has spearheaded the drive and performed particularly well.

The company saw "stellar growth in fresh soup", said Mr Whiteside, with sales up 50 per cent this year as the company puts an emphasis on "things we're not familiar for but things we want to get familiar for in the future".

The company also upgraded recipes for its most popular products, including Belgian buns, yum yums, jam doughnuts, steak bakes and cheese and onion pasties.

Clive Black, analyst at Shore Capital, said the turnround engineered by Mr Whiteside in the past year and a half had been "outstanding".

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"It hasn't been rocket science. It's been very hard, focused, diligent work that has re-engaged Greggs with the masses," he said.

"It's refreshing that in the age of social media and Black Friday the humble sausage roll is Britain's winner," he added.

Greggs said market conditions had been favourable.

"As long as inflation stays low and people are finding more pounds in their pocket at the end of the month that has to be helpful for us," said Mr Whiteside.

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