Shares in budget bakery chain Greggs jumped as it announced a strong finish to the year, bolstered by the popularity of lower-calorie meals and a growing demand for breakfast takeaways.
Greggs, best known for its sausage rolls and pasties, said total sales were up 7 per cent for the year ended 3 December as it continued to benefit from its low-calorie “balanced-choice” products, such as salads and yoghurts.
Shares in the high street chain jumped 4 per cent on Tuesday.
Like-for-like sales went up by 4.2 per cent for the whole of 2016, said the food retailer, while Christmas trading was boosted by festive bakes, mince pies and burritos.
Greggs opened 145 stores and closed 79, growing the estate to 1,743 shops in 2016.
Chief executive Roger Whiteside welcomed the results but warned of “industry headwinds” in 2017, such as rising costs.
“We can see already that real income growth is slowing as inflation takes hold in the market, putting pressure on discretionary spending. It's uncertain how the consumer will respond,” he told the Press Association.
“We're a value-led brand, so we will resist price increases as much as possible, but we do expect an impact on margins.”
“The outlook statement highlights the more uncertain trading environment, and industry-wide cost pressure which Greggs expect to have a 'modest-impact' on margins in the short term,” UBS analysts Heidi Richardson and Mark Fielding wrote in a note to clients.
However, “Greggs is well positioned to manage the more uncertain consumer backdrop and cost headwinds, with growth supported by new site openings, site refurbishments, and product innovation,” the analysts wrote.
