Greggs – the cheap and cheerful pastry purveyor – forecast 10% growth in pre-tax profits despite rising costs and a struggling economy.
It is not only proof that entrepreneurs can pass wealth down the generations but also that the right investment, at the right time, can turn a small town shop into a national chain.
Pre-tax profits are 10% up!
Analysts expect Greggs to report a pretax profit of about £163 million this year, according to Refinitiv, up 10% in 2022, Reuters reported.
Rising costs have hit Greggs, the company said on August 1. It expects inflation to moderate during the second half to 7%, from 11% in the first, putting the annual rate at around 9%.
Expansion plans regardless
Despite these costs and difficulties, the company plans to open 150 shops this year in airports and big supermarkets.
Another step for a remarkable family business that has grown from one shop in Newcastle to a nationwide chain of 2,400 stores.
Hard-working ambition the spur
When I first bought a Greggs stottie cake, when I moved to the northeast as a young reporter, in 1985, no one had heard of the company south of County Durham.A stottie cake is a flat, round, doughy, bread that is part of northeastern culture and was a staple in Greggs stores for people on the move – the core of the company’s business.
It all began with the hard-working ambition of a Geordie by the name of John Gregg. He started out delivering eggs and bread to working families in Newcastle, on his bike in 1939. When war broke out he parked his bike and joined the British Army and went off to fight.
On his return, Gregg started his own business and opened his first shop in Gosforth, Newcastle, on Tyneside, in 1951.
Sadly the founder died in 1964. His son Ian Gregg took over the family business. In those days it employed 15 people and was making £ 70,000 a year.
Twenty years on 300 shops
Twenty years later Greggs had 300 shops and was listed on the London Stock Exchange.
By 1994, Greggs had taken over 424 stores from the Baker’s Oven chain. This took it to 1,000 stores. Now it is an empire selling as many vegan sausages as pork ones.
Greggs has been through troubles too. Critics said its food did not contain as much meat as claimed. In response, Greggs said its delicious food is free from artificial colours, flavours and hydrogenated fats, and has no added trans fats.
The company apologises to Christians
In 2017, the company apologised to Christians after it put a sausage roll in place of the baby Jesus in a nativity scene in the company’s advent calendar.
Many billionaire entrepreneurs complain that their wealth struggles to be increased by subsequent generations of their families. Greggs is living proof that it can.
