The stocks of the popular bakery chain declined by 6 percent on Tuesday after the company announced a slowdown in sales growth in the third quarter. Sales at the company's own outlets increased by only 5 percent in the 13-week period ending on September 28, compared to a 7.4 percent increase in the first half of the year.
Greggs attributes weaker figures for the third quarter primarily to unrest in the UK and unusually poor summer weather. 'The violent riots have led to some of our key locations being avoided by customers for a while,' explained CEO Roisin Currie in an interview with the Financial Times. Additionally, the 'wet and gloomy summer months' and uncertainties ahead of the upcoming parliamentary elections have impacted business.
Despite these challenges, Currie looks to the future with confidence. She is convinced that the year 2025 will be "better than the past two years" for Greggs, as the company has established itself as a go-to place for price-sensitive consumers during the cost crisis. "Even if consumers have more money at their disposal again, they will carefully consider where to spend it," Currie adds.
Greggs has established itself as the preferred choice among many customers during the cost-of-living crisis. "We probably have more customers who used to come occasionally but now visit us more regularly. I believe this behavior will continue," explained Currie. Additionally, new products and extended evening hours are expected to further expand the customer base.
Here's the translation of the given heading to English:
"The weakening price growth in food will also relieve the cost pressure on the company, even if wages continue to rise, according to Currie. Data from the British Retail Consortium showed that store prices in the UK fell by 0.6 percent in September – the sharpest drop in more than three years.
Despite the weak third quarter, Greggs is pursuing its expansion strategy with determination. The bakery company from Newcastle plans to open between 140 and 160 new branches this year, having already added 145 new locations in 2023.
In 2021, the company set an ambitious growth target: By 2026, revenues are to be doubled, and "significantly more than 3,000 stores" are to be operated in the UK. Currently, the number stands at 2,559.
Sure, here is the translation of the provided text to English:
"Greggs' shares have gained 28 percent over the past twelve months despite the recent decline. Clive Black, head of the research department at Shore Capital, described the third quarter as 'weaker and more volatile than management had expected.' Nonetheless, he added that Greggs is well positioned to withstand difficult times.
The past years have shown that Greggs is well-positioned in times of high inflation and rising living costs," said Black. "However, as inflation falls and living standards rise, it remains to be seen whether Greggs will continue to be so well-positioned.
