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Gregs bosses have shown confidence in keeping sales growth improved after the UK bakery and fast food chains are boosted by a viral social media campaign for warm spring weather and new Mac and cheese dishes.
The makers of Pasties and Sausage Rolls reported similar sales increased by 2.9% in the first 20 weeks of the year, increasing their shares by almost 9% amid optimism over UK consumer spending rebounds.
Sales growth improved from a modest 1.7% increase in the first nine weeks when Gregs had to compete with a “severe” economic background as consumers faced a living crisis. It also suffered from contributions from national insurance and a rise in minimum wages.
Greggs CEO Roisin Currie said warm spring weather encouraged people to go shopping, and that even when consumers remained cautious, the emotions felt improved.
“Customers are still nervous. (But) early spring put people out shopping,” she told the Financial Times. “Consumers go out more to buy spring clothes, it’s heading out to the boulevard, retail park,” she said.
Greg’s shares reached its highest level since February, winning 8.9% on Tuesday.
“It feels like everything’s getting better,” Curry said.
The Newcastle-based company said growth is supported by a growing menu, including the introduction of Mac and cheese, chicken burgers and fish finger sandwiches, as well as longer trading times.
In addition to the new recipes for sandwiches, customers are particularly keen on new macaroni and cheese dishes, which went viral in Tiktok, Curry said.
“We launched Mac and cheese earlier this year and our customers love it. So we’re now trying to roll that product on Pace,” she said, adding that Greggs’ product team has found a Korean-style slow trend on social media.
However, some analysts remained cautious.
A Barclays analyst said in a note that Gregs benefited from better weather alongside his peers and that “this is not a trend we want to chase too hard.” Clive Black, a native of Shore Capital, said he would “take a step back” to the company’s capital expenditure.
