With people leading increasingly busy lives, many office workers place value and speed above all other factors when looking for a bite to eat at lunchtime.
This has caused profits at high street bakery chain Greggs to skyrocket, meaning that executives have now raised their full year profits expectations for the current financial year.
In the 24 weeks to the 13th of December, like for like sales at Greggs rose by 5.2 per cent, lifting like for like sales in the year so far by 4.2 per cent. Furthermore, total sales during the period climbed by 3.6 per cent, closing in upon 2013’s full year total sales increase of 3.7 per cent.
In a statement to the press following the release of the most recent set of results, chief executive Roger Whiteside said; “Whilst there is still much to play for over the final few weeks of the year, we currently anticipate that full year profits will be ahead of analysts’ expectations.
“Trading conditions have remained helpful but there is no doubt that customers are also responding to improvements in our product and service offer and to the investment we are making in the shop environment.”
This is not the first time that analysts have had cause to re-examine their forecasts for Greggs this year, as an extremely positive trading update in September indicated that previous expectations would be widely surpassed. As a result, Shore Capital analyst Clive Black revised his pre-tax profits expectation to £52 million, yet should conditions at the bakery chain remain as they are now, even this ambitious total could prove too conservative.
So how has Greggs turned around its situation, given that this time last year economists were voicing concerns over the future of the business?
In part, the turnaround has been due to Greggs’ changing business model in response to consumer feedback. Last January, Mr Whiteside confirmed that the bakery would be closing its remaining in-store bakeries over the course of this year as a means of focusing more upon food on the go, allowing the chain to better meet the needs of the office lunchtime rush market.
Additionally, Greggs has engaged in an intensive programme of store refurbishments, with 216 stores out of its total portfolio of 1,700 commercial properties undergoing works in the year to date. These changes have included installing new seating in larger stores, creating more space for queuing customers and altering counter displays to better showcase the produce on offer.
And with the high street gradually recovering, Greggs will be hoping this momentum will continue to build into 2015.
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