9:11am Friday 19th March 2010
By Deborah Johnson
BAKER Greggs yesterday set its sights on further expansion by targeting the early morning and early evening market, as it builds further on last year’s strong rise in sales and annual profits.
The Newcastle-based chain said it will look to attract more breakfast and early evening take-home sales by broadening its range and increasing its rate of store openings and refurbishments.
Greggs, which announced an eight per cent rise in profits for last year to £48.8m and a 4.8 per cent rise in sales to £658m, said its bacon sandwich and coffee breakfast specials, available in 1,300 of its 1,400 stores nationwide, have seen more than 500,000 sales in the four weeks they have been available, and were a definite opportunity for growth.
It comes as the chain prepares to push on with its plans to open 600 shops in the coming year, at a rate of between 50 and 60 shops this year, followed by at least 70 a year from 2011 onwards.
It is also looking to introduce more shops into locations where customers work and travel, such as transport hubs and industrial and retail parks.
The openings this year will be nationwide, but mainly in the South-West and South- East, and 120 refits will be completed this year, double the rate of previous years.
Ken McMeikan, chief executive of Greggs, said that 50 per cent of the population still cannot easily access one of its stores, which presented a further reason for expansion.
“We are really pleased with the trading performance for the full year, but in going forward, there are two trading periods we believe hold good opportunity – the early morning is a quiet period, as is the later afternoon and early evening. Less than two per cent of our sales come after 5pm,” he said.
“We know we have a good opportunity there with the workforce travelling to and from work, so we will look to provide them with a range of products.”
Mr McMeikan said he was optimistic for the year ahead, and said that Valentine’s Day and Mother’s Day had been strong trading periods for Greggs, with Easter being another key selling season in the baker’s calendar.
During the year, it has furthered its ambition of creating a single brand by converting 60 per cent of its 164 Bakers Oven shops to the Greggs fascia and it has launched a marketing campaign promoting Greggs as the home of fresh baking, which revolved around its use of fresh bacon.
Comedian Paddy McGuinness will not feature in the latest round of advertising, but may reappear in future campaigns, Mr McMeikan said.
The company also announced its 25th consecutive year of dividend growth since it floated on the stock market in 1984.
The total payout for the year to January 2 will be 16.6p, an increase of 11.4 per cent on a year earlier.
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