Greggs: Bakery chain sees profits jump 27% to £188m - as UK appetite for sausage rolls and steak bakes continues

Around 25,000 Greggs workers will share £17.6 million in bonuses this month after the high street bakery chain notched up a 27% hike in annual profits.

The group’s boss, Roisin Currie, said the staff will be given the bonus in their pay packets at the end of March to recognise their “hard work and effort” over 2023.

It comes after Greggs delivered a bumper pre-tax profit of £188.3 million for 2023, up from £148.3 million the previous year after like-for-like sales in company-managed shops jumped 13.7%. On an underlying basis, pre-tax profits lifted 13.1% to £167.7 million.

It saw sales growth slow to 9.4% in the final three months of the year as there was less contribution from price inflation. The group added that comparable store sales growth has slowed further, to 8.2% in the first nine weeks of 2024.

But the firm said it was “confident that Greggs can deliver another year of good progress” and remains on track to open between 140 to 160 shops this year after opening a record 220 sites in 2023.

It added: “Inflationary pressures are reducing and we have improved visibility of costs in the coming year. There is no change to management’s expectations for 2024.”

The group said it expects its own cost inflation to be between 4% and 5% but cautioned this was “subject to geopolitical risks”.

It said it was on track with plans set in 2021 to double sales over five years, adding that “what started as a plan is now a solid reality”.

Charlie Huggins, manager of the quality shares portfolio at Wealth Club, said: "Greggs has enjoyed an excellent year despite the challenging economic environment. Sales and profits have both risen, despite significant cost inflation, and the group is returning more cash to shareholders through dividends. All in all, an impressive performance.

"There is no doubt Greggs' brand is resonating strongly with the UK consumer and is in fine fettle. A record 220 new shop openings and longer opening hours have also extended the brand's reach, contributing to market share gains. This sales growth has enabled Greggs to continue increasing profits despite significant inflation in the cost of raw materials, energy and wages. Encouragingly, these cost pressures are now beginning to ease. This is good news for profit margins, as well as consumer demand as it should reduce the need for price increases.

"Key to Greggs' success is doing the simple things well. Its supply chain and infrastructure are top notch. Its operational execution is invariably flawless. And it is continually improving the offering. Overall, the future looks bright for Greggs and 2024 should be another year of progress."