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Greggs 15% sales growth driven by increased customer visits

Greggs, the leading bakery food-on-the-go retailer in the UK, with almost 2,000 retail outlets, has made a strong start to the year with total sales rising by 15.1% in the first 19 weeks of 2019 (2018: 4.7%).

During the period, the chain saw like-for-like sales in company-managed shops increase by 11.1%.

In the group's preliminary results announcement on 7 March, it reported a very strong start to 2019, with company-managed shop like-for-like sales growth of 9.6% in the first seven weeks of the year. This result built on a strong finish to 2018 and was further boosted by the publicity surrounding the launch of our vegan-friendly sausage roll.

Sales since then have continued to grow very strongly, helped by the roll-out of vegan-friendly sausage rolls to all shops following limited availability in the early part of the year when demand outstripped supply.

Other product categories have also shown good growth as customers have recognised the investment made in the product range and quality, and the shop environment in recent years.

Sales at breakfast, including Fairtrade coffee and other hot drinks, are continuing to grow strongly, as is the post-4pm pizza deal, offering a pizza slice and a drink for just £2. Sales of the traditional sweet bakery products are also benefiting from the improved quality delivered by investment in manufacturing centres of excellence.

The new summer menu has just launched, featuring pasta salads, fruit, cold drinks, and a new and improved vegan wrap - Mexican Bean & Sweet Potato. Customers continue to recognise the quality and value of our lunch offer, with Greggs recently recognised as `Britain's Favourite Sandwich Retailer' (source: NPD Crest) and, just last week, the chain picked up four awards at the British Sandwich Industry Awards.

In the first 19 weeks, Greggs opened 38 new shops, including 10 franchised units in transport locations. It closed 22 shops, giving a total of 1,969 shops trading at 11 May (comprising 1,700 company-managed shops and 269 franchised units).

Shop openings continue to take the Greggs brand into new food-on-the-go locations, and are increasing its presence in travel and workplace catchments. The success of sites such as the new unit at London Bridge station gives the firm confidence to pursue further openings in similar locations.

Commissioning of the new manufacturing platforms has progressed in line with plan. Sandwich rolls are now being produced at the group's Manchester and Enfield sites and construction of the new distribution centre at Amesbury in Wiltshire has started.

Deployment of SAP systems in payroll and manufacturing have progressed successfully with further roll-out to follow in the months ahead.

The exceptional level of like-for-like sales growth that began in January has been sustained in the months that have followed, driven by increased visits to stores. Looking forward, the sales comparatives from 2018 become progressively stronger but the firm now anticipates materially higher sales for the 2019 year as a whole than we had previously been expecting.