Greggs, the food-on-the-go chain, says cost pressures are reducing and it sees a clear opportunity for hundreds more UK shops ahead.

The company – best-known for its sausage rolls and steak bakes – made the announcements while revealing a leap in annual sales and profits.

Greggs said its performance in 2023 was aided by an expansion of opening hours to capture evening trade, strong breakfast demand and greater food delivery volumes.

Pre-tax profits rose by 21% to £188.3m on a leap of almost 20% in total sales.

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Part of the growth can be attributed to the effects of new store openings – 145, on a net basis, over the 12 month period.

Greggs said it planned to open between 140 and 160 shops during 2024.

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The company, which has 2,473 UK premises currently, maintained its ambition to grow “significantly” beyond the 3,000 figure.

The five-year plan to double sales by 2026 was on track, Greggs said, as it revealed that underlying sales at company-managed shops were up 8.2% in the first nine weeks of 2024.

The Newcastle-based firm said it expected that new stores in supermarkets, stations and airports, and adding drive-thrus would drive growth in future.

It signalled that the threat of further price increases was limited due to “improved visibility” on costs ahead and reduced inflationary pressures.

Shares rose by 3% at the open and were later up by around 4.5%.

Analysts said it reflected the positive outlook and announcement of a special dividend of 40p per share.

That was on top of the 62p annual payout.

John Moore, senior investment manager at wealth manager RBC Brewin Dolphin, said: “Today’s results from Greggs once again paint a picture of reliability from the high-street’s favourite baker.

“The company has seen good growth with an uptick in sales and profit, thanks to store management and innovation in terms of its opening hours, expanding product ranges, and delivery partnerships.

“Last year, external pressures of staffing and energy costs eased slightly, which is reflected in the bottom line.

“With cash to hand the business can continue to expand its shop footprint and reward investors with a special dividend on top of a 5% increase in the normal dividend, all of which should please long-term investors.”

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