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Tue 8th Mar 2022 - Greggs eyes 3,000-strong estate as it targets 150 new openings a year
Greggs eyes 3,000-strong estate as it targets 150 new openings a year: Greggs is to ramp up new openings to 150 a year – with an estate size target of 3,000 UK shops. Greggs has reported total sales up 5.3% on 2019 level to £1,229.7 million (2020: £811.3 million, 2019: £1,167.9 million) in the 52 weeks ended 1 January 2022. Like-for-like sales in company-managed shops were 3.3% down on 2019 level. Pre-tax profit was 145.6 million (2020: £13.7 million loss, 2019: £108.3 million profit) Colleague profit-sharing recommenced, with £16.6 million shared out. A total of 131 new shops opened in 2021 with 28 closures (103 net openings) – 2,181 shops were trading as at 1 January 2022. From 2022, Greggs is targeting 150 annual net new shop openings, with the potential for at least 3,000 shops in the UK over time. In addition, 200 refurbishments are planned in 2022 to support growth in additional channels. The company plans to extend late opening to 500 shops in year ahead, offering core menu plus hot food trials. It is extending delivery reach from 1,000 to 1,300 shops to complement evening availability. In the first nine weeks of 2022, like-for-like sales in company-managed shops up 3.7% compared to the 2020 level. Chief executive Roger Whiteside said: “Our results and achievements in 2021 show that we have emerged from the pandemic both stronger and better as a business. I would like to thank, once again, all of our teams across the country who rose so well to meet the challenges of the last two years. We have started 2022 well, helped by the easing of restrictions. Cost pressures are currently more significant than our initial expectations and, as ever, we will work to mitigate the impact of this on customers, however given this dynamic we do not currently expect material profit progression in the year ahead. Despite these near-term pressures, we continue to believe that the opportunities for Greggs have never been more exciting. Our investment over recent years has left the business well-placed to move quickly as the economy recovers and we drive our ambitious plans to become a larger, multi-channel business.”

Next edition of Propel’s Turnover & Profits Blue Book shows sector losses of £7.6bn: The next edition of Propel’s Turnover & Profits Blue Book, produced in association with Mapal Group, shows the effects of the pandemic, with total losses of £7.6bn being reported by 350 companies. However, a further 198 sector companies are still reporting total profits of £828.9m. The next edition will include 548 companies, an increase of 12 companies compared with the February edition. The 548 companies produce total turnover of £25.9bn. The next edition of the Blue Book will be sent to Premium subscribers on Friday, 18 March, at midday. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive two other databases – the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Domino’s targets 200 new UK stores: Domino’s is to target 200 new stores after reporting a strong performance last year. It saw system sales of £1,499.1m in the 52 weeks to 26 December 2021, up 11.2%. Like-for-like system sales, excluding splits, up 10.9% (9.8% including splits). Underlying like-for-like system sales (excluding the temporary benefit of VAT) grew by 5.5%, 150 basis points higher than last year’s equivalent figure of +4.0%. Underlying profit before tax was £113.9m, up £12.7m driven by strong underlying trading. The company reported average delivery times of around 25 minutes. Domino’s argued it was ‘now a truly digital-first business with 91.2% of sales through digital channels’. A new app was launched which now accounts for 42% of system sales (+2.2pts vs. 2020). It opened 31 new stores in the year with new stores trading ahead of expectations. On track to open at least 45 new stores in FY22. The company reported it had reached resolution with its ‘world-class franchisees heralding a new era of collaboration’. Its first national price campaign for several years was launched in January 2022. It added: “With the franchisee resolution, increased our medium-term targets to at least the upper end of £1.6bn – £1.9bn system sales.” The company added: “As previously guided, we expect FY22 underlying Ebitda and EPS to be in line with current market expectations. Trading in the first quarter has started well, aided by our first national price campaign for several years, made possible because of the resolution with our franchisees. Overall order count and customer acquisition continues to be positive, despite being up against a comparative quarter last year when there were strict lockdown restrictions in the UK. Our flexible and robust business model means we are well placed to adapt to changing market conditions and ongoing challenges related to inflation and recruitment. As such, we continue to expect an acceleration in underlying system sales growth (excluding the benefit of the reduced rate of VAT), largely driven by increased store openings and like-for-like growth due to the operating and capital investments associated with the franchisee resolution and continued implementation of our strategic plan.” Dominic Paul, chief executive, added: “This was a transformational year for Domino’s. Our performance continues to be strong, and we have made significant progress against our strategic plan, all while delivering on our ambition to return excess capital to shareholders. None of this would have been possible without the hard work of our franchisees and my fantastic colleagues. There were two major milestones in the year. First, the launch of our new strategy, which is already delivering outstanding results and a better experience for our customers. Secondly, the resolution with our franchisees which has unlocked further potential within the system. Our franchisees are world class operators and the whole team is already embracing a new era of collaboration, with the system working together more closely than ever before. This year has started well, and we now have the right strategy and a strong senior team in place to continue to drive the business forward. We remain focussed on accelerating the sustainable growth of our system together, to deliver a better future through food people love.”

Tasty plans five or six new sites this year: Wildwood operator Tasty is planning measured expansion of five to six new sites this year – and a refocus on takeaway and delivery. It reported revenue of £34.9m (2020: £24.2m) in the 52 weeks to 26 December 2021, an increase of 44% year-on-year with 33 weeks dine-in trading, driven by strong sales post re-opening despite weaker trading for the peak December period than anticipated, due to the onset of the Omicron variant. 2021 revenue represented 78% of the company’s 2019 revenues of £44.6m despite fewer operating sites. Adjusted Ebitda is expected to be approximately £8.0m (2020: £2.7m). Tasty is now trading out of 50 venues, with four restaurants currently closed but at different stages of re-opening planning. There are still ongoing negotiations to dispose of, or re-gear, two or three of the restaurant leases within the group. The company added: ”Since re-opening for dine-in in May 2021, the group was Ebitda positive and cash generative for the remainder of 2021. The strong trading post full re-opening of the estate up until the outbreak of Omicron in late November 2021 was encouraging. However, this has been tempered by the challenges which the company expects as a result of the end of government support including VAT and business rates. There is also an expectation of a reduction in pent-up demand, disposable income and staycations as well as a steep rise in inflation in relation to wages, utilities and input supplier costs as the UK adjusts to Brexit, the aftermath of the pandemic and the current war in Ukraine. Well-publicised industry employee shortages and supply issues are being managed and will continue to be a focus for the company. During the last twelve months, the company has invested in refreshing some of the older sites and increasing and renewing the outside seating across the estate, and this programme will continue throughout this year. In addition, there has been a recruitment drive to strengthen the head office team and operational structure. This increase in head count will facilitate a measured expansion plan for a pipeline of five to six new units this year and a refocus on takeaway and delivery which, following the lifting of covid restrictions, due to employee shortages has once again become secondary to the dine-in trade.”

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