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Greggs has indicated an easing of cost inflation as it made “further good progress” in the third quarter.
The high street bakery chain said this morning in a trading update that it expected the overall level of cost inflation for 2024 to be towards the lower end of the 4-5% range it previously flagged.
Total sales in the 13 weeks to 28 September increased by 10.6%, while like-for-like sales rose 5%. It represents a slowdown in like-for-like sales growth from the first half when the group reported a 7.4% jump.
Greggs said the growth was supported by menu development and further progress in extended trading hours and new digital channels.
The board’s expectations for the full year outcome remain unchanged.
“Greggs continues to extend its reach, bringing new shops closer to customers and establishing the supply chain capacity to support further growth,” the group said in the statement.
“Whilst acknowledging ongoing economic uncertainty, the board expects the full year outcome to be in line with its previous expectations. The board remains confident in the long-term growth opportunity for Greggs, and we are investing to support that growth.”
Greggs has opened 152 new shops in the year to date and closed 66, giving it an estate of 2,559 at the end of the quarter.
Morning update
Food inflation has picked up in September as the rate at which fresh food prices increased accelerated, according to this morning’s BRC-NielsenIQ shop price index.
Fresh food inflation increased from 1% in August to 1.5% this month, while ambient food slowed from 3.4% to 3.3%.
It meant food inflation overall increased from 2% to 2.3%.
Overall shop prices moved further into deflation in September, down from 0.3% to 0.6% as non-food shops pushed big discounts to entice shoppers.
Haleon has purchased £230m of its own shares from Pfizer as the pharmaceutical giant further reduces its stake in the consumer healthcare group.
As well as selling shares to Haleon, Pfizer also sold off some of its holding in the company to institutional investors to bring in a total of £2.4bn.
Pfizer’s interest in Haleon’s issued ordinary shares with voting rights is now expected to reduce from 22.6% to 15%, with the business beginning to reduce its stake back in March.
Haleon, which sells Panadol, Centrum and Sensodyne, was formed from a combination of GSK and Pfizer’s consumer-health units.
CEO Brian McNamara said: “Our purchase of shares from Pfizer will successfully deliver on our commitment to return £500m to shareholders through share buybacks this year, and marks another milestone in Pfizer reducing its stake in Haleon following our listing in July 2022.”
The FTSE 100 nudged up 0.1% to 8,246.74pts.
Shares in Greggs tumbled 3.8% to 3,005.8p this morning given the slowdown in LfL growth.
And Haleon is down 1% to 389.1p following the share sale by Pfizer.
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