Sandwich and bakery chain Greggs says its store upgrade programme is making “good progress”, with 118 refurbishments completed in the last six months.
Based on those figures, the refurbishment of stores to its latest bakery food-on-the-go format is currently taking place at a rate of almost five outlets a week.
Greggs has also commenced the conversion of its larger bakery cafes, with 12 completed in the first half. It plans to update between 200 and 220 shops during 2015.
CEO Roger Whiteside said the pace of change reflected the “significant” upgrade project that it is embarking on.
“The overall quality of our shop estate has continued to improve through our shop opening and closure programme and we have returned to net shop growth,” he said. “We opened 44new shops (including 25 franchise units) and closed 30 shops, giving a total of 1,664 shops (of which 70are franchise units) trading at 4 July2015.”
Whiteside said he expects shop numbers for the full year to increase by a net 20-30 shops overall.
First half sales to July 4 2015 grew 6% to £398m, according to financial figures released yesterday.
The company said operating margin benefited from the impact of strong like-for-like sales in the period and a £2.4m year-on-year cost reduction as a result of last year’s restructuring of its in-store bakeries and support operations.
Most of this restructuring benefit has now annualised, with a further £600,000 year-on-year benefit to come in the second half of 2015.
Greggs posted an operating profit of £25.6m in the first half of the year, up from £16.8m the year before.
“We have had a strong first half with good growth in sales reflecting improvements in our products and the reaction to our shop investment programme,” said Whiteside. “Our offer of great tasting food-on-the-go is being well received by the consumer in market conditions that have remained favourable. In particular we have seen significant growth in breakfast sales as well as from the extension of our “Balanced Choice” range of sandwiches and flatbreads with fewer than 400 calories.”
He added: “With the shop refurbishment programme continuing to progress well and new additions to the product range including pizza slices, we are confident of delivering a year of good growth slightly ahead of our previous expectations.”