By Sarah Young
LONDON (Reuters) - British food-to-go retailer Greggs (LON:GRG) said it expected 2024 to be another year of growth after it posted a 13% rise in profit last year, helped by strong demand for breakfasts, evening opening hours and expanding in food delivery.
The Newcastle upon Tyne-headquartered company, which is famous for its sausage rolls and vegan steak bakes, said on Tuesday that new stores in supermarkets, stations and airports, and adding drive-thrus would drive growth.
Shares in Greggs traded up 2% to 2,760 pence in early deals as the company confirmed it had started 2024 well, with underlying sales up 8.2% in the first nine weeks.
A five-year plan to double sales by 2026 and open 3,000 stores in the longer term was on track, Greggs said, as Britons, squeezed by high inflation and interest rates, sought value options.
"You can shop with us a few times a week and still be cheaper than potentially having a few coffees somewhere else. We know that encourages frequency of purchase," Chief Executive Roisin Currie said in an interview.
The company, which has 2,473 stores, recently overtook McDonald's as Britain's no.1 breakfast on-the-go retailer, which Currie said reflected the popularity of its hot food options.
Customers can also buy their evening meal at Greggs as half its shops now open late, or stay at home and order a Greggs pizza or chicken shawarma flatbread from the Just Eat and Uber (NYSE:UBER) Eat platforms, Currie said.
Greggs' underlying pretax profit excluding exceptional income rose 13% to 168 million pounds ($213 million) for 2023 on total sales of 1.8 billion pounds. Analysts expect profits to rise another 11% this year.
The group said it would pay a special dividend of 40 pence per share on top of its 62 pence annual payout.
($1 = 0.7889 pounds)