Sales are rising at Greggs (GRG) the baker, driven by its pursuit of the 'food-to-go' market. Breakfast and coffee sales were stand-out performers during the first half, while the group's sandwich range has prospered after last summer's relaunch. The baker reported strong growth in its 'balanced choice' products, aimed at health-conscious consumers and slimmers, which now include a range of no-added-sugar drinks. Product extensions, as well as Greggs' £2 meal value deals, helped drive up like-for like sales by 5.9 per cent.
Greggs is also ploughing ahead with its refurbishment programme, switching 118 new stores to its 'bakery food-on-the-go format'. The baker also moved back into net store growth, opening 44 and closing 30. Accordingly the group's capital expenditure increased by a third to £31.3m, with this year's total spend expected to come in at around £65m. While Greggs' consolidation of its in-store bakeries depressed profits in 2014, it resulted in a £2.4m cost-reduction this year and boosted the group’s operating margin. Other structural cost reduction plans are expected to generate £5m-£6m in savings over the full year.