Greggs CEO Roisin Currie has defended the chain’s health credentials as it turns to items like pizza, fried chicken and potato wedges to reinvigorate its slowing sales.
The high street business, best known for sausage rolls and steak bakes, expanded its hot food range last year as it tries to attract more customers in the evening.
The chain hopes new foods such as fish finger sandwiches, chicken wraps and chicken burgers can help draw greater sales after 4pm. The evening currently accounted for just 9% of Greggs’ income but represented more than a third of the total food-to-go market, said Currie.
But with its new four-slice pizza box containing around 2,500 calories and triple the recommended daily fat intake, its expansion may do little to help Brits’ poor health.
It comes as a new study in the Lancet this week found about a third of British children aged five to nine are on course to be obese or overweight by 2050, in what researchers called a “monumental societal failure”.
However, Currie pointed out Greggs has sought to expand its healthy options in recent years to give customers more choice.
“We’ve been working hard on our healthier choice menu,” she said. “Over the last couple of years, we have brought more salads to the range. We have brought more flatbreads to the range.
“The breadth of our range is so important because you can come in a few times a week and have a soup or a salad or a flatbread. But you can then have an occasional treat with a sausage roll or a doughnut.”
Greggs’ share price is down around 10% today after like-for-like sales grew just 1.7% in the first nine weeks of the year.
Russ Mould, investment director at AJ Bell, noted amid “a serious slowdown in growth… Greggs is doing everything it can to stay on top, such as further menu innovation”.
He warned, however, that it might be moving too far away from the products that drove its success and bring it into conflict with new rivals.
“Burgers, pizzas and chicken goujons make Greggs more of a direct rival to kebab shops that are 10 a penny across the country, ” he said.
Currie blamed the weakness in January on disruptive weather conditions, adding that while trading had improved in February, weak consumer confidence was still a drag on sales.
While Greggs’ pre-tax profits were ahead of expectations last year, “the good news ends here”, said Ben Hunt, a research analyst at Panmure Liberum, noting initiatives such as evening trading look “lacklustre”.
“Evening trading is not resonating with customers,” he argued, suggesting this makes expectations for 3.5% like-for-like sales growth challenging.
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