Greggs predicts higher profits as it bucks high street gloom

Greggs has raised its profit guidance for the fourth time this year as the bakery chain continues to buck the high street slowdown.

The company’s shares rose by more than 15% after reporting that total sales for the six weeks to 9 November were up 12.4%. The firm, which has more than 2,000 stores across the UK, has thrived despite the malaise afflicting many businesses.

Sales in 2018 exceeded £1bn for the first time and the successful launch of its Quorn-filled vegan sausage roll has underpinned another strong year. Greggs’s market value has surged by about three quarters in the past 12 months.

“Sales growth continues to be driven by increased customer visits and has been stronger than we had expected,” said Greggs in a trading update on Monday. “The board now anticipates that full-year underlying profit before tax will be higher than our previous expectations.”

Greggs, which hopes to take a bite out of rivals such as Pret a Manger, said total sales were up 13.4% for the year to date.

“Today’s update suggests food-on-the-go firm Greggs is more than a one-trick pony,” said Russ Mould, an investment director at AJ Bell. “The products it sells might not always be the healthiest but its business looks in good shape.

“In a busy world where people don’t always have time to stop for a sit down meal, there has to be a place for outlets which offer affordable hot and cold food and Greggs looks to be serving that need nicely at the moment.”