Greggs PLC (LSE:GRG), the high street bakery, will offer an insight into whether consumers are still downtrading during the cost-of-living crisis when it rolls out first quarter results on Tuesday.
The sausage roll and steak slice seller’s share price is up more than a third in the last twelve months, despite a tough macro backdrop, as consumers found joy in the group’s cheaper offerings.
This allowed the group’s sales to jump by 23% year-on-year in the 2022 financial year, as revenues totalled more than £1.5bln
Despite the costs of sales reaching around £575mln in 2022, the food retailer was still able to function with a 38% gross margin.
“Higher costs have still been eating into profits and investors will be eager to find out when inflationary pressures will show more signs of dropping away,” said Susannah Streeter from Hargreaves Lansdown.
Greggs expects cost inflation for 2023 to sit between 9%-10%, so any changes to these assumptions this early in the year could see the share price slide or lift.
The company has been diligent about maintaining strong revenues though.
“Signs of flakier revenues in harder hit high street have been met with a swift restructuring of its network of stores, with less popular outlets closing while expansion is driven in suburbs and transport hubs,” Streeter added.
Greggs will also hold its annual general meeting this week, on Wednesday 17 May.