Yahoo Finance Greggs to open in Sainsbury's stores across UK
High street baker Greggs (GRG.L) is set to open cafes in several Sainsbury's (SBRY.L) locations across the country by the end of the year, building on the pair's existing partnership.
The first Greggs-Sainsbury's collaboration cafe was launched at a petrol station in Bedfordshire. The initiative will expand the pool to about half a dozen locations including cafes and concessions attached to garages.
In addition, the company is set to extend opening hours into the evening in most locations and trial new options such as a hot wrap.
A small number of locations will be open 24 hours, including Gatwick airport which opened last week, Roisin Currie, Greggs CEO, said on Tuesday.
Currie added that customers are "still under pressure" due to the cost of living crisis. Costs "continue to be front of mind," she said.
Energy prices and significant wage increases for workers have been factors where the business has felt most under pressure in recent months, as inflation and interest rates are on the rise.
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June saw small price increases on a small number of items, however Currie said no further price increases are slated.
The chain is continuing to look at international expansion but remains focused on the UK market as its priority for now.
The news comes as the pastry merchant set out its half-year financial results. Greggs held to its forecasts for higher year-end profits after posting a 14% rise in profits in its half-year update.
Total sales amounted to £844m ($1bn), compared with £694.5m a year before. It posted an underlying pretax profit, excluding exceptional items, of £63.7m. Underlying sales were 16% higher.
It lifted its interim dividend by 7%, to 16 pence a share.
Despite the uptick, and figures that met expectations, shares fell around 4% in early trade in London.
"Greggs isn't out of the woods just yet. Cost inflation may have eased but it remains unsavoury," said Charlie Huggins, manager of the quality shares portfolio at Wealth Club.
"Meanwhile, pressure on the UK consumer could build into the second half as the impact of higher interest rates starts to bite. But Greggs is in a far better position than most retailers and is more than holding its own. Should inflation continue to moderate, the business could really be in a sweet spot."
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