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Greggs Third-Quarter Sales Increase on Bacon Rolls

Oct. 6 (Bloomberg) -- Greggs Plc, the U.K.’s biggest bakery chain, said third-quarter sales increased as it sold more breakfast items such as bacon rolls.

Total sales in the 13 weeks to Oct. 2 rose 2.1 percent, while sales at stores open at least a year increased 0.2 percent, the Newcastle, England-based company said in a statement today.

Greggs has added breakfast items to boost sales in what was traditionally a quieter period. Bacon rolls are now the best-selling sandwich line, with almost 7 million sold since their introduction in February, Chief Executive Officer Ken McMeikan said. The bakery chain plans to introduce items such as croissants, pain au chocolat and porridge.

“Our breakfast range has been really popular and we are building on this,” McMeikan said in a conference call with reporters. “Times are going to continue to be tough, our customers will look for value for money.”

Greggs is expanding outside its traditional city-center sites into locations such as industrial estates, airports and rail stations. The company added 32 stores this year, giving it a total of 1,451, and said it sees total net shops for the year at the upper end of a previously indicated range of 50 to 60.

There are still plans to open more than 70 shops next year, McMeikan said.

Greggs shares fell 1.75 percent to 466.7 pence at the 4:30 p.m. close in London, giving the company a market value of 477.25 million pounds ($759.2 million).

Price Increases

Greggs has raised prices for bread and some savoury items because of higher flour prices driven by the cost of wheat, McMeikan said.

“Our customers have seen some small price increases for bread and some savouries, this will stay through quarter four,” he said, “We expect the market to be tough in 2011 like this year, but we will continue to grow.”

The price of wheat more than doubled between June and August as drought slashed the Russian harvest. Greggs has purchased flour for the rest of the year and McMeikan said its requirements were covered until the “middle of next year.”

To contact the reporter on this story: Renee Lawrence in London at rlawrence7@bloomberg.net

To contact the editors responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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