Legendary British food brand Greggs (GB:GRG) has seen sales soar in the first half of 2022, climbing 27% to £695 million – driven in part by new healthier options such as fruit pots.
Fans will be reassured that demand for the High Street brand’s steak bakes and sausage rolls remained resilient – and new evening meal options such as pizza also grew rapidly, the company said.
The company has attempted to limit the effects of inflation and has fixed input prices for an average of five months across key areas – but said that pre-tax profits remained steady at £55.8m and were not expected to rise this year.
Consumer incomes under pressure
Roisin Currie, CEO, who took over the business in January said, “It is a tough market out there in terms of energy and food but we will work hard to protect our price leadership.
“In a market where consumer incomes are under pressure, Greggs offers exceptional value for customers looking for food and drink on the go.
“We are well positioned to navigate the widely publicised challenges affecting the economy and continue to have a number of exciting growth opportunities ahead, with a clear strategy for expansion. We remain confident in Greggs’ ability to deliver continued success.”
Price rises in the pipeline
The company warned that customers could face price rises after the baker warned that costs will rise by 9% this year, more than predicted at the start of the year.
Greggs raised prices by 5p to 10p in January with a further rise in May – and Currie said that the chain would keep prices under review.
View from the City
According to TipRanks’ analyst rating consensus, Greggs stock has a Moderate Buy rating. This is based on two ratings, with one Buy and one Hold recommendation.
The average price target is 2475p, which is around 16.31% higher than the current price level. The price has a high forecast of 3000p and a low forecast of 1,950.00p.
Conclusion
With food delivery brands seeing demand wilt post-pandemic, High Street giant Greggs has kept its feet firmly planted on the ground.
