Greggs is rising higher on a wave of mince pies

Mar 15 2010 by Iain Laing, The Journal

THERE are high hopes of rising revenues at Newcastle retail baker Greggs this week as well as updates from retailers Debenhams and French Connection and an update from Royal Dutch Shell.

Greggs will report its full-year figures on Thursday after a better- than-expected performance at the end of last year, thanks to a boost from festive demand for mince pies.

The group shrugged off adverse pre-Christmas weather to drive a 1.1% rise in comparable sales in the four weeks to Boxing Day, which took analysts by surprise.

The Tyneside firm, which currently has 1,419 stores across the UK, sold more than one million mince pies a week during Christmas, helping lift end-of year trade. Sales across the year as a whole increased by 0.8%.

The firm emerged as one of the survivors of the retail bloodbath seen amid the recession and is now planning further store expansion to capitalise on growing popularity for its value for money proposition.

It outlined plans in October for another 600 shops in parts of the UK where it is currently under-represented, such as the South West, North East Scotland and North Wales.

This opening programme will see around 50 to 60 shops launched this year, followed by at least 70 a year from 2011 onwards.

Analysts are expecting this expansion to drive robust sales over the next few years, with like-for-like growth also remaining stable, at around 1.5% in 2010, according to Shore Capital expert Clive Black.

In terms of last year’s performance, the consensus forecast is for a marginal lift in pre-tax profits to £46.5m against £45.2m in 2008 after the group put in a resilient performance against recessionary pressures.

Meanwhile Royal Dutch Shell chief executive Peter Voser faces a tough challenge tomorrow when he presents the oil major’s strategy update to a sceptical City.