Greggs’ full-year profit forecasts have increased despite staffing and supply chain issues.
Like-for-likes in the third quarter rose 3.5 per cent compared with the same pre-pandemic period two years ago.
“Food input inflation pressures are also increasing; whilst we have short-term protection as a result of our forward buying positions we expect costs to increase towards the end of 2021 and into 2022,” Greggs said.
Russ Mould from AJ Bell said: “Greggs is going global. The firm’s reinvention from a pretty tired discount baker to a refreshed food-on-the-go outlet with strong vegan credentials is testament to its management’s agility and poise and even as it contends with the aftermath of the pandemic and supply chain issues, it is not standing still.
“Looking through the current turmoil, Greggs has ambitions to be a much larger business in five years’ time and you couldn’t accuse its plan to double turnover by 2026 of being in any way cautious.
“While some of this will be delivered by new openings, including its first overseas sites since a modest experiment in Belgium in the noughties, Greggs is also looking to expand opening times into the early evenings too, supported by an enhanced delivery offering.
“By getting more out of existing sites, the company hopes to boost profitability and cash flow and ultimately translate this into a more generous portion of dividends for shareholders.
“Sometimes you have to take risks in business to get ahead and Greggs has looked at a somewhat hollowed out central London and spied a big opportunity, with plans to take advantage of depressed property costs by expanding its footprint in the capital.
“It’s when times are tough that management really earn their corn and despite seeing shortages on a daily basis and facing inflationary and staffing pressures it is impressive that the company still felt able to raise profit forecasts for 2021.”