Food-on-the-go firm Greggs (GRG) served up a surprisingly positive trading update for the third quarter to 1 October, with like-for-like sales from company-managed stores up 9.7% year-on-year.

Admittedly, growth did moderate in August as the food-to-go retailer lapped a prior year comparative boosted by 2021’s strong ‘staycation’ effect, yet Greggs reported a reassuring pick-up in September sales and left full-year guidance unchanged.

Greggs also reminded the market that supported by a strong balance sheet, it is working on developing ways of expanding capacity to ‘support our significant growth ambitions’.

Reaffirmed guidance came as a big relief following a series of profit warnings from domestic consumer-facing names over recent weeks with investors particularly pleased as new CEO Roisin Currie maintained the outlook for this year’s cost inflation at around 9% rather than lift it.

Greggs insisted it now holds ‘an appropriate level of forward purchasing cover in respect of our fourth quarter requirements for key food and energy commodities’ and has ‘significant energy cover for the first quarter of 2023, with average costs expected to be below the level of the recently-announced price cap’.

Labour costs could still be a headache for the business heading into 2023 and as pressures on household budgets continue to mount the resilience of Greggs’ value-based proposition is likely to be further tested.

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