Shares of Newcastle-based Greggs fell as much as 15% on Thursday despite the company reporting that total sales for financial year 2024 rose 11.3% to a record £2.014 billion.
In a fourth quarter trading update, Greggs said company-managed shop like-for-like sales were up 5.5% for FY24. Fourth quarter total sales were up 7.7%, but company-managed shop like-for-like sales rose only 2.5% for the fourth quarter reflecting the “more subdued” High Street footfall.
“Trading performance reflected a well-publicised more challenging market backdrop in the second half of 2024,” said Greggs.
“Lower consumer confidence impacted High Street footfall and industry-wide visits and expenditure. Against this challenging backdrop, Greggs maintained its market share of visits, including remaining customers’ number one destination for breakfast, and controlled operational costs well.
“We continue to broaden the appeal of Greggs to existing and new customers through a combination of menu development, marketing and extension into new channels and dayparts.
“Seasonal lines were in high demand in the fourth quarter, including the iconic Festive Bake, the Vegan Festive Bake and the all-new Festive Flatbread.
“These featured alongside our shop-baked Sweet Mince Pies, Christmas Cake Slice and festive hot drinks including the Gingerbread Latte. Pizza continued to perform strongly during the day and into the evening, with sales of pizza boxes and pizza bundle deals continuing to grow …
“Despite growth in disposable incomes, consumer confidence was subdued in the second half of 2024 and this weighed on industry-wide customer visits and expenditure.
“With good cost management in the final quarter the Board anticipates reporting a full year outcome for FY24 in line with its previous expectations.
“Looking into 2025, employment costs will result in further overall cost inflation, although wage increases should provide support to consumers. Greggs has demonstrated its ability to mitigate cost inflation in recent years whilst retaining its value leadership, and we are confident we can continue to do so.
“Despite the current headwinds the significant longer-term opportunity for Greggs remains. We are investing to support our ambitious growth plan and are confident that Greggs can deliver another year of progress in 2025.”
Greggs CEO Roisin Currie said: “2024 was another year of good progress by Greggs, with a record number of new shops opened and the £2 billion sales milestone surpassed. I’m proud of our teams who, day in and day out, do such a fantastic job for our customers.
“We enter 2025 with a strong pipeline of new shop opportunities, and we continue to broaden our menu and enhance our digital capabilities, whilst also developing our supply chain capacity to deliver our growth strategy.
“Whilst lower consumer confidence continues to impact High Street footfall and expenditure, our value-for-money offer and the quality of our freshly-prepared food and drink position us well to meet the headwinds we expect to see in the year ahead, and we remain confident in the significant long-term opportunity for growth.”