GREGGS boss Roger Whiteside says the food chain could support at least another 350 stores across the UK.
Following a major overhaul of its operations to focus on “food-on-the-go”, the North East bakery chain reported own shop like-for-like sales growth of 8.2% over Christmas and New Year.
Strong trading over the three weeks to January 3 owed to the success of new products such as a steak and cheese roll, as well as £1m in coffee sales.
Greggs opened 50 new stores and closed 70 during 2014. Mr Whiteside confirmed 2015 would be a year of net store network growth.
Speaking to The Journal, the chief executive said there were no plans on the horizon to make acquisitions but emphasised his ambition to expand Greggs’ presence across retail and office parks, as well as travel locations.
Mr Whiteside said experimentation with new store locations – such as concessions in a small number of Spar stores and an outlet on the Isle of Wight ferry – had proven successful.
He explained: “There is still a lot of opportunity for Greggs, particularly in these high-footfall locations where people are shopping and working. There is still some room for high street openings, perhaps in the South East and South West, but for the most part we’re looking at these new locations.
“I expect most new stores in 2015 to be our own stores, but there are some locations such as motorway services where you need franchise partners to access the market.”
Commenting on the prospects for 2015, Mr Whiteside said the firm had entered the New Year with a “tail wind” behind it. March’s full year results are now likely to surpass expectations.
For the 2014 financial year as a whole – the 53 weeks ended January 3 – total sales grew by 5.5% including the impact of the additional trading week.
Greggs’ range of meal deals, including a £2 breakfast deal and a £3 sandwich and drink deal, had been instrumental in driving sales.
Mr Whiteside said bundling its new range of coffee with food-on-the-go products had helped to encourage increased spend per customer, and now the firm would focus its attention on securing repeat custom.
He said: “Our ‘food-on-the-go’ focused product range clearly struck a chord with customers over the Christmas period with growth in sales of sandwiches, sausage rolls and coffee.
“Sales of our ‘Balanced Choice’ range of products with fewer than 400 calories continue to grow and new products such as our fresh soups and our steak and cheese roll were well received.”
Looking to the year ahead Mr Whiteside welcomed falling petrol prices for giving consumers more spending power and highlighted low commodity prices for their part in protecting margins.
Fiona Cincotta, a senior market analyst at Finspreads, said: “Market forecasts called for pre-tax profit of £53.6m vs. £41.3m the year before.
“Since December, market forecasts rose to £58.96m. The fact that Greggs repeated that it would beat expectations suggests market forecasts are still too low - clearly bullish for the shares.”
Shares in Greggs rose 9.01% on Tuesday following the trading update.