MORE GREGGS
FOR EVERYONE
WELCOME
2023 was another year of rapid growth and
strong progress for Greggs. Our teams across
the business, whether in our shops, our
manufacturing sites, our distribution network,
or in Greggs House, continued to rise to the
challenge of serving more customers through
more channels – working tirelessly to keep pace
with increased customer demand.
Two years into our exciting, ambitious five-year plan to
double sales by 2026 and to have significantly more than
3,000 shops in the UK, our growth strategy is working.
The significant opportunities on which the strategy is
based will remain centre stage as we make Greggs more
accessible to even more customers.
Despite inflation and the resulting cost-of-living pressure,
the resilience of the Greggs brand and the strength of our
underlying business means we kept on providing the great
value, tasty products and friendly service that our
customers love us for.
I am optimistic and excited about delivering our bold
five-year growth plan as we continue on our journey to
become a significantly larger, multi-channel business.
GREGGS IS
FOR EVERYONE
Strategic Report
2023 highlights 1
At a glance 2
Year in review 4
Chair’s Statement 8
Business model 10
Market review 12
Chief Executive’s Report 14
Our strategy 22
Our strategy in action 24
Key performance indicators 34
Our People 36
Sustainability Report 43
The Greggs Pledge 43
Task Force on Climate-related
Financial Disclosures 46
Financial review 54
Risk management 59
Directors’ Report
Board of Directors and Secretary 66
Governance Report 68
Our stakeholders 75
Audit Committee Report 80
Directors’ Remuneration Report 86
Statement of Directors’
Responsibilities 111
Accounts
Independent Auditor’s Report 113
Consolidated income statement 119
Consolidated statement
of comprehensive income 119
Balance sheets 120
Statements of changes in equity 121
Statements of cash flows 123
Notes to the
consolidated accounts 125
Alternative performance
measures 164
Secretary and advisers 166
USING OUR COMPLETE REPORTING SUITE
Throughout this report you can find links to our complementary suite
of reporting by following these icons:
online at corporate.greggs.co.uk/investors
in other Greggs publications
within another section of this report
You can also read our Annual Report online at
corporate.greggs.co.uk/investors
IN THIS REPORT
Roisin Currie
Chief Executive
5 March 2024
1Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
2023 HIGHLIGHTS
TOTAL SALES
£1,810m
2022: £1,513 million
DILUTED EARNINGS PER SHARE
123.8p
**
2022: 117.5p
LIKE-FOR-LIKE (‘LFL’) SALES
+13.7%
***
PRE-TAX PROFIT **
£167.7m
2022: £148.3m profit
COLLEAGUE PROFIT-SHARING
£17.6m
2022: £16.6m
TOTAL ORDINARY DIVIDEND
62.0p
2022: 59.0p
SPECIAL DIVIDEND
40.0p
2022: nil
* Detailed calculations of Alternative Performance Measures, not otherwise shown in the Accounts and related Notes, are shown on pages 164 and 165
** Excluding exceptional items
*** Like-for-like sales in company-managed shops (excluding franchises) with a calendar year’s trading history
MORE GREGGS FOR EVERYONE
In October 2021, we set out our ambitious plan
to double our sales by 2026 and have made
great progress against our 2023 targets.
Our four key growth drivers are the focus of
our plan and ensure we are able to serve our
customers whenever, wherever and however
they choose to shop with us. Our strategic
growth plan is underpinned by investment
in our Supply Chain and technology and our
ongoing commitment to doing good through
The Greggs Pledge.
Read more about our progress against our key growth
drivers on pages 22 to 33
HIGHLIGHTS
FINANCIAL HIGHLIGHTS*
THE GREGGS PLEDGE
Our sustainability plan, The Greggs Pledge,
focuses on how we are doing more to help
our communities, protect the planet and
work with our partners to change the world
for the better. Our latest Sustainability Report,
published alongside the Annual Report, is
available to view on our corporate website.
Read more about our progress toward The Greggs
Pledge commitments on pages 43 to 45
OUR PEOPLE
With 32,000 amazing colleagues, it is our
people that make our business successful.
It is important that we provide them with a
great place to work, where they feel valued,
can be the best version of themselves and
choose to stay with us.
Read more about how we ensure our colleagues are
firmly at the heart of the business in the new ‘Our People’
section on pages 36 to 42
2
AT A GLANCE
MANUFACTURING
In our own food manufacturing centres of
excellence, we make great tasting, freshly
prepared food that our customers can trust.
LOGISTICS
We move products from our food manufacturing
sites to our shops ourselves, which helps us to
keep our prices as low as possible.
OUR PEOPLE
We have 32,000 amazing colleagues, working
together to provide our customers with the best
experience, offering fast and friendly service,
day in, day out.
CUSTOMER CHANNELS
With 2,500 shops, including more than 500 with
franchise partners, our wholesale partnership,
delivery service and Click + Collect, we are
available to serve customers wherever,
whenever, and however they choose.
CUSTOMER RELATIONSHIPS
Through our Greggs App, we are building
long-term connections with our customers
and rewarding their loyalty. Our Customer
Relationship Management (‘CRM’) systems allow
us to talk to our customers on a one-to-one basis
and to serve them even better, with exclusive
offers and benefits for being an App customer.
With ownership of our Supply Chain, multiple service
channels for our customers and 2,500 shops nationwide,
we are in a unique position to make great tasting, freshly
prepared food accessible to everyone. Our teams across
the business are dedicated to providing our customers
with great tasting food-on-the-go and the best
experience, day in, day out.
OUR PURPOSE
To make great tasting, freshly
prepared food accessible to everyone
OUR VISION
To be the customers’ favourite
for food-on-the-go
What we do
BETTER
BUSINESS FOR
EVERYONE
3Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
How we create value for our stakeholders
COLLEAGUE PROFIT-SHARING
£17.6m
2022: £16.6m
DONATED TO THE GREGGS FOUNDATION
£2.6m
2022: £2.2m
TOTAL ORDINARY DIVIDEND
62.0p
2022: 59.0p
REWARDING
OUR COLLEAGUES
We know that our people are our most
valuable asset, so we make sure that our
colleagues are paid fairly, treated well, and
given the training and opportunities they
deserve. We believe all of our people should
share in our success. Every year, 10% of our
profits are shared among our colleagues.
Read more about our people and culture on
pages 36 to 42
CREATING SUSTAINABLE VALUE
FOR OUR SHAREHOLDERS
We always strive to be a good corporate citizen and to treat
everyone – our colleagues, customers, suppliers, partners
and shareholders – with fairness, consideration, and respect.
As well as supporting our communities by paying our taxes,
providing thousands of fairly-paid jobs and supporting a
number of charitable causes, we are redoubling our efforts to
make Greggs a great place to work. We want to be an inclusive
employer that our colleagues recommend to their friends.
We always set high standards for what we purchase, with the
aim of making things better in our supply chain and working
collaboratively with our suppliers, so they raise their game too.
Read more about our business model on pages 10 and 11
GIVING BACK TO THE
COMMUNITIES IN WHICH WE SERVE
Greggs has a proud reputation of giving back.
Since John Gregg founded the business in 1939, we
have always tried to do the right thing to help build
stronger, healthier communities and to lead positive
change. We donate to a wide range of charitable
causes, and every year, we give at least 1% of profits
to our corporate charity, The Greggs Foundation.
Our donation, along with support from our
customers, colleagues and partners, enabled the
charity to distribute over £4.5 million in 2023 to
schools and charitable organisations in the UK.
Read more about The Greggs Pledge on pages 43 to 45
Read The
Greggs Pledge
at corporate.
greggs.co.uk/
doing-good/
SPECIAL DIVIDEND
40.0p
2022: nil
4
YEAR IN REVIEW
A YEAR
FILLED WITH
FLAVOUR
Opened first shop
with Sainsbury’s
at Biggleswade
petrol station
Building on our existing partnership
with Tesco, we were delighted to team
up with Sainsbury’s to bring a new type
of concession to customers at its petrol
stations. Throughout the year, we opened
a further four concessions with Sainsbury’s,
including two in-shop café formats. In 2023,
we opened 22 shops in supermarkets and
will expand on this further in 2024.
From the annual publication of
The Greggs Pledge and raising
record amounts for Children in
Need and The Greggs Foundation,
to celebrating awards, new shop
openings, hitting key milestones
with our franchise partners and
expanding our delivery offer
with new partner Uber Eats –
there’s a lot to be proud of.
Published our third annual
sustainability report,
The Greggs Pledge
We reported on our progress against our ten commitments
to do more to help people, protect the planet and work
with our partners to change the world for the better,
including a pledge to achieve net zero carbon, as we all
fight to save our planet from the threat of global warming.
Our latest report is available to view here:
corporate.greggs.co.uk/doing-good/
APRIL
MAY
5Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
The Greggs Foundation
scoops the Corporate
Foundation Award
Our corporate charity The Greggs Foundation
received this award at the 2023 Business Charity
Awards. The Greggs Foundation’s Breakfast Clubs,
Hardship Programme and Community Funding
initiatives are delivering on our commitment to
build stronger healthier communities. The charity
was recognised by the judging panel for having a
‘clear focus and mission’ and showcasing ‘creative
ways to tackle inequalities and reach those that
need support the most’.
Over £190,000 raised during
two Breakfast Club appeals
for The Greggs Foundation
Thanks to our colleagues, customers, partners
and the fantastic Greggs Foundation team, we
were able to raise an incredible amount during our
Breakfast Club appeals for The Greggs Foundation.
This will help to fund nutritious breakfasts for
children, who may otherwise go without, at one
of over 890 Breakfast Clubs across the UK.
MAY
We celebrate two award
wins at The Sandwich and
Food to Go Industry Awards
As outlined in The Greggs Pledge, we work hard to provide
our customers with well-priced, tempting and tasty healthier
options. We were delighted that this was recognised at The
Sandwich and Food to Go Industry Awards (‘The Sammies’)
in 2023, where we not only won chain retailer of the year,
but also the healthy eating award for our Sweet Potato Bhaji
and Rice Salad Bowl. This is awarded to new, interesting and
innovative healthy eating products, considering not only the
calories in the product, but taste, presentation and
commercial viability.
MAY
JULY & SEPTEMBER
6
YEAR IN REVIEW CONTINUED
Greggs launches at
London Gatwick Airport
We were excited to open a new shop in Gatwick
Airport, marking our first airport site in London,
andeighth airport location in the UK.
This is a major milestone in our growth strategy,
as we look to expand beyond the high street to
key transport hubs across the UK. The shop is
open 24 hours and sells our full menu, ranging from
breakfast deals, freshly-made sandwiches, salads,
bakes and sweet treats to hot food options such as
Southern Fried Potato Wedges and Southern Fried
Chicken Goujons. Located at the South Terminal
Arrivals, the shop greets customers as they walk
through the doors, offering a warm welcome to all.
We welcome Uber Eats as
our second delivery partner
After a successful trial, we were delighted to roll out
the Uber Eats delivery platform across a number of
our shops. Together with Just Eat, delivery is now
available from more than 1,440 of our shops, helping
us to make Greggs even more accessible to our
customers.
AUGUST
Bolton – home to our first
24-hour drive-thru
Since the launch of the first drive-thru six years ago,
this shop format has rapidly gained popularity, with
34 locations currently operational.
With 24-hour operations, the Bolton drive-thru
serves customers around the clock, particularly
catering to the needs of local shift workers.
Strategically positioned just off the M61, it
exemplifies our focus on placing drive-thru shops on
main arterial routes with significant traffic volume.
The drive-thru format is larger than Greggs’ standard
shops and plays a pivotal role in our multi-channel
operation, which incorporates digital channels,
delivery services, as well as in-store purchases.
Extended trading hours at these locations are part
of the Company’s strategic growth plan, addressing
evolving consumer habits and enhancing the evening
offer with a focus on pizza and hot food such as
Southern Fried Chicken Goujons and Wedges.
JULY
OCTOBER
7Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Over £1 million raised
for BBC Children in Need
Now in our 17
th
year as a partner, thanks to the
dedication of our colleagues and customers,
we’re incredibly proud to have raised over
£1 million for BBC Children in Need in 2023.
From creative and entertaining fundraising
activities and generous donations, to our customers
enjoying Pudsey buns and biscuits, we are always
overwhelmed by the kindness and generosity shown
for this appeal.
We opened our
500
th
franchise shop
We celebrated this big milestone with our franchise
partner MFG in Monktonhall, East Lothian. As we roll
out new shops across the country, with an increased
focus on targeting on-the-go locations that are
accessible by car, franchise partners will continue to
play a critical part in supporting our expansion plans.
Our franchise model now accounts for 20% of the
total estate.
A festive season
we’ll not forget
From announcing the return of our iconic festive
bakes through a dedicated drone show, taking our
customers back in time with our ‘festive rewind’
music events to treating lucky diners to a
one-of-a-kind dining experience with a bistro
twist through our partnership with Fenwick –
it was a busy festive season that surprised and
delighted customers and showcased the innovative
spirit that sets our brand apart.
Fourth savoury line installed at
Balliol Park manufacturing site
Key to ensuring we can grow our business smoothly and
efficiently is significant investment in our Supply Chain.
Our iconic sausage rolls and bakes are made at Balliol Park;
to help ensure we can keep up with customer demand
as we grow, we have installed a fourth savoury line,
which, when fully operational, will enable us to produce
four million additional bakes every week.
NOVEMBER
NOVEMBER
DECEMBERDECEMBER
8
CHAIR’S STATEMENT
STRONGER RESULTS
WITH A CLEARER
STRATEGY
It’s great to see the progress that Greggs
has made in 2023. Strong operational
delivery has resulted in a record
financial performance and further
cemented our market position. The
clarity and execution of our strategy
positions Greggs well for the significant
opportunities that lie ahead as we invest
for further sustainable growth.
Matt Davies
Chair
Overview
Greggs delivered another strong performance in 2023,
making good progress against our strategic plan and further
strengthening the Company’s position as a leader in the
food-to-go market. In a period when the rising cost of living
was all too evident the Greggs value proposition shone
through and was reflected in growing customer visits
and record ratings for value-for-money.
The Board’s activity in the year reflects its oversight
of the Company’s strategic development as well as the
maintenance of high standards of governance, with
oversight of risk management and returns a key focus given
our significant capital expenditure plans. We have engaged
with management plans for the expansion of the shop estate,
franchise partnerships and the development of new digital
channels. To support the significant growth potential that
lies ahead the Board has scrutinised and approved plans for
further Supply Chain investment, which will unlock further
capacity in the years ahead. Risk management remains high
on our agenda and in 2023 the Board spent time with the
Company’s advisers considering the external risk landscape
and the implications for our strategic risk register.
The sustainability of Greggs is founded on our responsible
approach to doing business. The Greggs Pledge sets out our
ambitions to be even better in the years ahead and we can
all feel justly proud of our progress on this journey.
9Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Our people and values
Greggs colleagues across the business have yet again
played a pivotal role in the progress we continue to make,
and I would like to thank them for their continued outstanding
contribution.
It is important that the Board stays close to the views of our
colleagues and Directors devote significant time to activity
that lets them hear first-hand what is on our people’s minds.
Visits to shops, supply sites and support teams, as well as
attendance at listening forums equip Directors to understand
the practical implications of our plans and challenge the
executive management team. Food development has also
been a focus – as a business with food at its heart the
fundamental evolution of our range to reflect changing
consumer tastes and health credentials is critical and I am
proud of the progress that our teams continue to make.
The Board
Nigel Mills joined the Board in the first quarter of 2023 and
took on the role of Senior Independent Director with effect
from the annual general meeting (‘AGM’) on 17 May 2023. We
said farewell to Sandra Turner, Senior Independent Director,
and Helena Ganczakowski, following their planned retirement
from the Board. Both have made significant contributions to
the strategic repositioning of Greggs and depart knowing that
they have left the business in great shape. The Nominations
Committee is looking to recruit a further Non-Executive
Director and we expect to report progress in the year ahead.
Further details of the Board’s work are included in the
Governance and Committee sections of this Report.
Dividend
At the time of the interim results in August 2023 the Board
declared an interim ordinary dividend of 16.0 pence per share
(2022: 15.0 pence per share). In line with our progressive
ordinary dividend policy and our target for the ordinary
dividend to be twice covered by earnings, the Board intends to
recommend at the AGM a final dividend of 46.0 pence per share
(2022: 44.0 pence per share), giving a total ordinary dividend for
the year of 62.0 pence per share (2022: 59.0 pence per share).
Our capital allocation policy, as outlined in the Financial
Review, details our approach to distribution and the
methodology for determining and returning any surplus
cash to shareholders. In application of this policy the Board
has approved a special dividend of 40.0 pence per share.
Looking ahead
I am proud of Greggs’ achievements in 2023 and confident in
the plans that we have for the year ahead. Our clear strategy,
great team, powerful product proposition and robust
financial health position us well for further success as
we invest in our plans for long-term growth.
Matt Davies
Chair
5 March 2024
In a period when the rising
cost of living was all too
evident the Greggs value
proposition shone through
and was reflected in growing
customer visits and record
ratings for value-for-money.
10
First-class
support teams
ENGAGE
Best customer
experience
SERVICE
BUSINESS MODEL
OUR PURPOSE
To make great tasting, freshly prepared food accessible to everyone
Our people…
32,000
amazing colleagues across our business
People are at the heart of everything
we do. We have 32,000 amazing
colleagues across our business – in our
shops, Supply Chain and central support
teams, and each and every one has an
invaluable part to play in our success.
Our colleagues work together to provide
our customers with the best experience
every day. We want to provide them with
a great place to work, where they feel
valued, want to stay with us, and are able
to thrive and be the very best version of
themselves.
…focus on our
four strategic pillars…
…and continue to
enhance our offering by…
Growing and developing
the Greggs estate
Developing our digital channels
Expanding our evening trade
Broadening customer appeal
and driving loyalty
Investing in our Supply Chain and
technology for a bigger business
Great tasting,
freshly prepared food
QUALITY
Competitive
Supply Chain
VALUE
Find out more about our strategy on pages 22 to 33
11Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
OUR VISION
To be the customers’ favourite for food-on-the-go
…and help realise
The Greggs Pledge
to build:
Stronger, healthier
communities
A safer planet
A better business
COMMUNITIES
£4.5m
Greggs believes in giving back
to the communities we serve.
With our support, The Greggs
Foundation was able to distribute
over £4.5 million last year to schools
and charitable organisations in
theUK.
SUPPLIERS
94.5%
We’re also a great brand to work
with. 94.5% of invoices were paid to
suppliers within the terms agreed.
COLLEAGUES
74%
Greggs is a great place to work,
with a 74% engagement score in the
most recent colleague engagement
opinion survey.
SHAREHOLDERS
102.0p
We provide value to our
shareholders, with 62.0p ordinary
dividend paid in line with our
progressive dividend policy and
a special dividend of 40.0p.
…to deliver value to all our stakeholders…
CUSTOMERS
No.1
Greggs is rated No.1 for value on the YouGov
BrandIndex 2023, within the quick-service
restaurant, coffee shop and delivery
services group.
We want our customers to have the best
experience with Greggs, wherever, whenever
and however they shop with us. And, we want
them to visit us time and time again. So, we’ve
been working to expand and improve our
2,500-strong shop estate, as well as our
wholesale and delivery partnerships.
We’ve also been working hard behind the
scenes developing our digital channels to
offer more value and convenience to our
customers via Click + Collect, and the Greggs
App, the way we communicate with our
customers and reward them for their loyalty.
Find out more about how we engage with our stakeholders on pages 75 to 79
More about The Greggs Pledge on pages 43 to 45
12
MARKET REVIEW
ADAPTING TO CONSTANT
MARKET CHANGES
At Greggs, we pay close attention to the evolving
macro and consumer trends that we believe are
most likely to impact our operations. This allows
us to anticipate and mitigate challenges, but also
to seize new opportunities as they arise.
Climate change
The climate crisis requires urgent action and businesses
have an important role to play. Improved governance
and reporting across all industries and sectors will
continue to drive the reduction of carbon emissions
across society, assisting with both adaptation and
the transition to a low-carbon future.
GREGGS’ RESPONSE
More extreme weather may affect our supply chain,
infrastructure and operations; we have undertaken
work to fully understand the key risks and impacts of
climate change on our business. Our Net Zero Steering
Group is challenging the climate impact of every area of
our operations and driving action to reduce it. We aim
to be net zero by 2040 – a decade earlier than the UK
Government’s plan.
Find out more in our TCFD Report on pages 46 to 53
Nature and biodiversity
Human activities are causing a worrying decline in
biodiversity. An increasing human population is putting
ever-greater pressure on natural habitats and leading to
the over-exploitation of our natural resources, concerns
which are further exacerbated by changes to the climate
caused by human activity.
GREGGS’ RESPONSE
Wherever possible, we seek to avoid contributing
to deforestation or land-use change by purchasing
certified sustainable commodities – such as
wood-based products, beef, palm oil, and soy, details
of which can be found within our deforestation policy.
Our recent partnership with EcoVadis gives us the
option to assess the environmental practices of chosen
suppliers and continue to review the wider impacts of
our operation to identify further improvements we can
make. We will disclose our findings in line with the
requirements of the Task Force on Nature-related
Financial Disclosures (‘TNFD’).
Find out more about The Greggs Pledge commitment to Sustainable
Sourcing in our sustainability report
Geopolitical uncertainty
Global political tensions and conflicts continue and
Greggs must ensure business security and continuity
in uncertain operating conditions.
GREGGS’ RESPONSE
We ensure business resilience through our ongoing
enterprise risk management (‘ERM’) process.
Inflation/cost of living
Economic pressure from inflation is directly impacting
the market and our consumer base.
GREGGS’ RESPONSE
As a value-led business, it is vital that we monitor the
economic situation and find ways to mitigate costs
to ensure we continue to support our customers and
communities with great tasting, affordable products.
Macro trends
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
13Greggs plc Annual Report and Accounts 2023
Dietary shifts
A growing number of consumers are choosing to reduce
their consumption of animal products, for ethical, health
or environmental reasons.
GREGGS’ RESPONSE
We pay close attention to changing consumer preferences
and capitalise on the growing trend towards eating less
meat through our innovative range of plant-based products,
beginning in 2019 with the launch of our – now iconic – Greggs
vegan sausage roll. We offer at least one vegan option to our
customers at all times of the day.
Healthy eating
Rising obesity levels and diet-related ill health are putting
enormous pressure on the NHS, and the UK Government is
combatting this through policy and education programmes
aimed at improving the nation’s eating habits.
GREGGS’ RESPONSE
We have committed to ensure that at least 30% of the
products on our shelves are healthier choices through
expanding our range of salads, flat breads, and rice bowls.
We have reformulated many of our sweet treats and
savouries to reduce the sugar, salt, fat, and calories in them
without impacting their taste. We help our customers to
make informed choices by providing calorie and nutritional
information on shelf, on packaging, and on the Greggs App
and website.
Find out more about The Greggs Pledge commitment on Healthier Choices
in our sustainability report
Eco-conscious consumers
Consumers’ buying habits are increasingly influenced by
their concern for the environment and a desire to reduce
pollution and avoid wasting resources.
GREGGS’ RESPONSE
In 2019, we removed over 350 tonnes of single-use plastic
from our operations, and then launched an ambitious
programme to review all our product packaging to increase
its recycled content and recyclability, and reduce the
volume. By the end of 2025, we will use 25% less packaging,
by weight (as a percentage of sales), than we did in 2019.
Our Eco-Shop provides a test bed for future in-store
sustainability initiatives aimed at reducing the environmental
impact of our operations.
Find out more about The Greggs Pledge commitments on Packaging and
Eco-Shops in our sustainability report
Consumer trends
I AM PROUD OF OUR PEOPLE, EXCITED
BY OUR PROGRESS, AND OPTIMISTIC
ABOUT OUR FUTURE GROWTH.
14
CHIEF EXECUTIVE’S REPORT
A record year
In 2023, our like-for-like sales in company-managed shops
were up 13.7% on 2022 showing that, two years into our
ambitious five-year plan to double sales, our strategy is
working with sales up circa 50% over that period.
What started as a plan, is now a solid reality. Greggs is
the UK’s leading food-to-go brand (YouGov’s Brand Index),
and during 2023 we became customers’ number one
destination for breakfast with a 19.6% share of visits.
Our success demonstrates that the growth drivers we
are pursuing are the right ones, giving us the confidence
to accelerate our efforts. We will open our 2,500
th
shop in
the coming weeks and see the potential for significantly
more than 3,000 in the UK in the longer term. Meanwhile,
our multi-channel strategy is allowing us to grow home
delivery and Click + Collect orders, and we are reconfiguring
our shops to allow us to serve digital customers more quickly
and smoothly whilst ensuring our walk-in customers
continue to receive the brilliant service they are used to.
We are keeping more shops open for longer, expanding our
share of the evening food-to-go market, and we are building
our brand by making Greggs mean more to more people.
Reflecting on another year of rapid growth, I am so
proud of how our teams have risen to the challenge
of serving more customers through more channels.
Whether in our shops, our manufacturing sites, our
distribution network, or in Greggs House, our teams
stepped up to make sure that we kept pace with the
increased customer demand as we delivered on our
strategic growth plan.
Despite an economic backdrop that continued to
be challenging with high inflation and the resulting
cost-of-living pressure, the resilience of the Greggs
brand and the strength of our business mean we
kept on providing the great value, tasty products
and friendly service that our customers love us for.
We are very much on track to deliver our bold
five-year growth plan to double sales by 2026 and to
have significantly more than 3,000 shops in the UK
over the longer term.
Roisin Currie
Chief Executive
15Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
That means strengthening the loyalty of our existing base,
while broadening that base by enticing new people through
our doors and converting occasional shoppers into regulars.
To meet this increase in customer demand, we are investing
in our manufacturing sites and distribution networks so that
all parts of our vertically-integrated business grow together.
At the heart of Greggs is our value proposition. Our teams
have done everything they can this year to ensure that
our great quality, freshly prepared food is available and
accessible to everyone. We have been relentless in our
search for efficiency gains so that we can protect our pricing
and continue to provide outstanding value for our customers.
Financial results
Total sales grew to £1,810 million in 2023 (2022: £1,513 million),
a 19.6% increase on the level seen in 2022. Within this,
company-managed shop like-for-like sales were 13.7%
higher than the equivalent period in 2022.
Underlying pre-tax profit for the year increased to
£167.7 million (2022: £148.3 million), in addition to which we
recorded exceptional income of £20.6 million. For further
detail, see the full Financial Review.
Our key drivers of growth
Broadening customer appeal
This growth driver is about telling our customers all the ways
they can interact with us – growing awareness of our menu
and new developments, our opening hours, our delivery
service, and our Click + Collect offer – and building their
loyalty through rewards and engaging communications
via our website and app.
Our aim is to reach all food-to-go consumers across the UK
throughout the day, letting them know that they can find us
whenever and wherever they fancy.
We have worked hard to win and keep the loyalty of our
regular customers and I’m delighted that our successful
growth strategy is allowing us to welcome so many new
customers too.
The cost-of-living crisis has affected everyone; rising energy
bills and interest rates have meant we are all looking for ways to
make our money go further. As a value proposition, Greggs has
been well placed to help. We have noticed occasional Greggs
customers becoming regulars and we know that rewarding
their loyalty is helping to increase the frequency of visits.
Our brand awareness remains consistently high at 95%,
and we have worked hard this year to let people know that
Greggs is for everyone. Our market share is at an all-time
high, with Greggs’ total share of visits in the food-to-go
market increasing to 8.2% (2022: 7.7%) (source: Circana,
December 2023).
In December, we launched a pop-up ‘Bistro Greggs’ in the
premium department store Fenwick, in Newcastle upon
Tyne, proving that Greggs’ quality is welcomed everywhere.
Our products were reinterpreted by Fenwick’s chef and
served under silver cloches to be eaten with knives and forks.
This tongue-in-cheek partnership delivered gems such as
‘Greggs Benedict’ and Steak Bake paired with truffled
dauphinoise potatoes.
Another key event in 2023 was Fender’s Unplugged, a
two-day live music event in our Grainger Street shop in
Newcastle in celebration of Geordie legend Sam Fender
ahead of his headline appearances at St James’ Park.
Growing and developing the Greggs estate
During 2023, we opened 220 new shops (145 net of closures
and relocations) meaning that, by the end of the year, we had
2,473 shops trading (comprising 1,970 company-managed
shops and 503 franchised units). As well as continuing to
nurture and build our presence on the high street, our
much-loved brand soared to new heights with further
openings in travel hubs, including our first in a London
airport, at Gatwick, more roadside locations, more retail
parks and supermarkets and further expansion of our
drive-thru offer.
We have also grown our reach in central London, adding
new shops across the capital including Canary Wharf and
Waterloo railway stations, and the Westfield Shopping Centre
in Shepherd’s Bush.
220
new shops (including 72 franchised units)
opened in 2023
1,200
shops open until 7pm, or beyond
16
CHIEF EXECUTIVE’S REPORT CONTINUED
We expanded our partnerships with other retailers;
opening four new ‘Tasty’ cafes inside Primark stores
(taking the total to six), 17 further shops in Tesco stores
(taking the total to thirty-two), and five with our newest
retail partner, Sainsbury’s.
We proudly celebrated the opening of our 500
th
franchise
shop. Working with our 16 franchise partners has enabled
us to reach new locations and has been key to increasing
our presence in motorway services and petrol forecourts.
Our franchise model is key in supporting the delivery of
our long-term growth strategy.
Growth isn’t just about opening new shops, it is also about
finding bigger, better premises for successful sites. During
the year, we relocated 42 shops. In Runcorn, for instance,
we swapped our site for the unit next door which is three
times as big allowing us to add seating, a hot food cabinet,
and better facilities for our colleagues. Sales in the shop
were up 30% following the move and we have the space
to accommodate further growth. We have identified a
further 50 shops that we plan to relocate to bigger,
better sites in 2024.
Our programme of shop refits is also making sure that
our existing estate looks great and remains appealing. We
refitted 122 shops in 2023 using our newest design which
maximises space while also making it easier for our teams
to service our delivery and Click + Collect digital channels.
We plan to refurbish a further 195 shops in 2024.
Extending evening trade
During 2023, we continued to open our shops later into the
evening and now have more than 1,200 sites competing for
food-on-the-go-sales until 7pm or later. Throughout the
year, evening (defined as post-4pm sales) was the fastest
growing daypart, albeit from a low base. As a result evening
sales were 8.7% of company-managed shop sales in the
second half of 2023, and our market share for the evening
daypart increased to 1.6% for 2023 (2022: 1.2%, source:
Circana, December 2023).
We know many customers stop by our shops on their way
home from work, looking for quick and easy evening meals
and snacks. Our delivery service also plays a key role in the
evening trade, with more than 600 of our later-opening shops
available to customers via Just Eat or Uber Eats. We see
strong potential for expanding our home delivery offer
further in this daypart.
Competing for evening sales means having the right
products to meet our customers’ preferences. Our existing
range is proving popular, with our hot Southern Fried Chicken
Goujons, Southern Fried Potato Wedges, and pizzas all
selling well. Our family pizza box (available for delivery) comes
with six individual slices and can be customised, meaning
that everyone can get the flavour they want. We continue to
innovate with new hot food options and expanded our pizza
range with a Spicy Veg version this year, as well as trialling
new menu ideas such as Mozzarella and Cheddar Bites.
Our ongoing focus is on making sure we have the right
products in the evening to give people more reasons to
visit us and, in 2024, we will continue our trial with a number
of items including customisable hot chicken wraps and
made-to-order drinks.
Developing digital channels
Greggs is now a truly multi-channel retailer. We aim to
serve our customers wherever, whenever, and however they
choose. That might be a customer visiting a shop, someone
who wants the frictionless experience of Click + Collect, or
customers at work or at home who want the convenience
of Greggs delivered to their door.
I have been extremely impressed by the growth in engagement
with our loyalty app, whereby customers benefit from our
popular ‘buy-9-get-the-10
th
-free’ offer. Use of the Greggs App
doubled during 2023, far exceeding our internal targets.
WHAT MAKES US
DIFFERENT?
17Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
In the year as a whole, customers scanned the Greggs App
in 12.5% of transactions in our company-managed shops
(2022: 6.2%), and in the final quarter of the year the
participation rate exceeded 15%. Customers who engage
with our loyalty app shop more frequently with us and we
are able to market to them directly, which provides further
opportunity to drive sales growth through this channel.
The slick efficiency of Click + Collect continues to help busy
people save precious minutes in their day and use of this
digital service continues to increase. Busy commuters,
for example, can now pay for their morning coffee or bacon
sandwich before their train has pulled into their station,
choose a time slot, skip the queue and go straight to the
counter to collect their order.
Sales through the delivery channel were up 23.6% in 2023.
We introduced home delivery during the Covid-19 pandemic
in 2020 through a partnership with Just Eat, and in Q3 2023
extended our reach by rolling out with Uber Eats. We now
have 1,340 shops offering delivery through Just Eat and
930 sites working with Uber Eats. A total of 1,440 shops offer
delivery services, allowing us to now offer home delivery
across the UK. In 2023 this channel represented 5.6% of
company-managed shop sales, and we grew our market
share of food-to-go delivery visits to 3.8% in 2023
(2022: 2.7%) (source: Circana, December 2023).
For our customers, shopping with us gets simpler and easier
every year as we use technology to make things better and
more rewarding. Behind the scenes, that means we are
managing greater complexity, but our teams have done a
fantastic job of integrating new systems, working hard to
enable our processes to stay streamlined and simple for the
shop teams so that they can continue to operate at pace and
deliver great customer service.
Greggs is a much-loved and trusted brand that
has been around for 85 years, building a reputation
for offering exceptional value to people looking
for great tasting, high quality food – and drink-on-
the-go, with fast and friendly service.
PURPOSE
To make good, freshly prepared food accessible
to everyone.
QUALITY
We want our products to be the best they can be.
CONVENIENCE
We want to be able to serve customers wherever,
whenever and however they choose.
VALUE
We offer great value in an extremely competitive
marketplace.
SERVICE
We provide customers with fast and friendly service,
and fix issues without a fuss, rewarding them for
their loyalty.
THE GREGGS PLEDGE
Stronger, healthier communities. Better business.
Safer planet.
12.5%
of company-managed sales
scanned through the Greggs App
23.6%
increase in sales through
the delivery channel in 2023
18
CHIEF EXECUTIVE’S REPORT CONTINUED
Investing in our Supply Chain and
technology for a bigger business
One of the unique strengths of our business is its vertical
integration: we own and run the manufacturing sites and
logistics operations that serve our shops. Our ambitious
plans mean that we are investing further in our infrastructure
to ensure that we can increase Supply Chain capacity to
support business growth, as previously communicated
in our capital expenditure forecasts.
Investment in our Balliol Park manufacturing site will
enable us to increase production of savoury rolls and bakes
by 35% over time, and the additional pizza line at our Enfield
site commissioned in late 2022 has double the capacity of
our original line.
In order to facilitate further expansion, we plan to build
two brand new state-of-the-art facilities in the Midlands.
The first site will be for frozen products and will be located
in Derby. Opening in 2026, this site will not only provide
additional manufacturing capacity for frozen products,
including new savoury and sweet production lines, but also
enable frozen storage, picking and distribution which will be
key to our future growth.
The second site will be located in the Kettering/Corby area,
and will be a new National Distribution Centre for the storage,
picking and distribution of ambient and chilled goods. The
site will enable our existing Radial Distribution Centres to
service many more shops, allowing them to support growth
in their regions. We expect this site to be operational in the
first half of 2027.
In the meantime we are investing in scaling up two of our
existing Radial Distribution Centres. We are currently on-site
undertaking work to double capacity at our Amesbury
distribution facility and are restructuring our Birmingham
site into a more efficient purpose-designed operation which
will increase our capacity. These two projects will add the
capacity to service around 300 more shops to our network.
In the second half of 2023, we took over the lease of a
substantial warehousing facility next to our Kettering
distribution centre when our supplier entered administration,
securing our requirements and saving the jobs of everyone
employed at the site.
During 2023, we added more double-deck trailers to our
fleet. We now have 34 vehicles able to carry 56% more
per load, with a further 18 arriving in the business by 2025.
These reduce the carbon intensity of our logistics operations
and also save on fuel.
We continue to make improvements to our shop systems,
making processes simpler for our colleagues. We tested
a new, upgraded till suite that was redesigned based on
feedback from our people and we will roll out the clearer,
easier system to all shops during the current year.
Looking after our people
For the first time, we are including a section on ‘Our People’
in our Annual Report because our colleagues, culture and
values are what makes Greggs, Greggs. We know that when
our people thrive, our business is stronger and better, so we
work hard to make Greggs a great place to work.
Just as our customers are relying on us to help them
weather the current challenging economic circumstances,
our colleagues rely on us too: we pride ourselves on paying
fair wages, providing secure employment, and offering
consistent contracted hours so that our colleagues know
what their weekly wage will be, and can budget for it.
We continue to share 10% of our profits with team members
with at least six months of service. We have also increased
our matched contribution rates for Greggs pensions,
meaning that all our colleagues can now access up to
6% employer contributions.
19Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
On top of this, we offer a colleague discount, our colleague
share ownership scheme, and an Employee Assistance
Programme that gives our people access to additional help
when they need extra support – we make sure that we are
there for them, whatever they need.
All this helps to keep our people motivated and committed
to Greggs. More than 24,000 colleagues completed our
annual employee survey in 2023, and three-quarters of
them told us that they would recommend Greggs as a
great place to work – 7% ahead of the UK retail benchmark
(source: People Insight).
We know that great people are important to our long-term
sustainable growth. We nurture and grow talent within our
organisation so that our pipeline of future leaders is primed,
and there are great people ready to step into our
management team as we expand.
Our growth also means that we are creating new jobs
across the country within our shops, manufacturing sites
and distribution networks. During 2023, we created 1,597
net new jobs.
A significant number of our shop and area managers started
as team members and worked their way up, proving that
Greggs can be an agent of social mobility. The flexibility of
our roles enables people to arrange their work life around
their personal life – reducing their hours to part-time when
they have school-aged children, for instance, or pushing for
training and career progression when they are ready for
more of a challenge. Whatever they want from us, we aim
to provide long-term employment.
Giving back
We continue to donate at least 1% of our underlying pre-tax
profits to the Greggs Foundation each year, which it then
passes on to our communities through hardship grants,
community funding, and donations to help run the
Breakfast Club programme.
This is generously topped up by our colleagues, partners
and customers: we raised a record £202,000 through 25p
‘buy a child a breakfast’ donations in Greggs shops last year –
three times the amount raised in 2022 – and ran Greggs
Breakfast Club Appeal Weeks in June and September,
raising a further £190,000.
During 2023, the Greggs Foundation distributed over
£4.5 million to schools and charitable organisations in the
UK, including £1.5 million in hardship funding as it responded
to the increased need from our communities due to the
cost-of-living crisis. Almost half of all the hardship grants
awarded last year went to families in schools with a
Greggs Foundation Breakfast Club.
In addition to donating money to the Greggs Foundation,
our fundraising activities raised over £1 million for Children in
Need, a charity we have supported for 17 years now. We also
proudly celebrated our 40-year partnership with the charity
Children’s Cancer North through its annual Children’s Cancer
Run. In February, we turned our charity buckets over to the
Disasters Emergency Committee raising £149,000 to help
people in Turkey and Syria who were affected by the
devastating earthquakes.
The Greggs Pledge
We want our people to be proud to work for Greggs. Not
just because of the great job they do, day in and day out,
but because they are part of a business that strives to do
the right thing. Together, we are working towards delivering
The Greggs Pledge – ten commitments that aim to make the
world a better place. Our latest report on the progress we
made towards these commitments in 2023 will be published
in the coming weeks and I share some highlights below.
Stronger, healthier communities
Greggs Foundation Breakfast Clubs continue to grow. By
the end of 2023, we had Clubs in 896 schools feeding 62,000
school children every day. This is about so much more than
providing a free meal in Britain’s least-privileged areas: our
Clubs also contribute to improving attendance rates, helping
to build the habit of turning up to school every day, and
ensuring children start their day with a full stomach, so they
are better able to concentrate at school which, over time,
means they are more likely to fulfil their potential. In this way,
Greggs Foundation Breakfast Clubs are making a meaningful
20
contribution to enabling social mobility – fundamental for
a flourishing society.
We now have 35 Outlet shops open around the country,
providing people on a budget with the opportunity to buy
day-old Greggs products at a discount. A portion of the
profits made in these shops is then given to local community
organisations working to tackle food poverty. In 2023, that
donation totalled almost £650,000. Outlet shops also play an
important part in our efforts to make sure that unsold food is
put to good use. We passed around 2,600 tonnes of surplus
food to this network of shops in 2023 – approximately 44%
more than 2022.
Of course, our focus on healthier communities is also
delivered through our commitment to ensuring that 30%
of our product range is a healthier option. We provide our
customers with well-priced, tempting, and tasty healthier
options including porridge, soups, and salads and, during
2023, introduced a new range of flatbread sandwiches,
improved the veg content of our pasta salad, and launched
new savoury bakes, including the Spicy Vegetable Curry
Bake. We were delighted that our efforts were recognised
at the 2023 Sandwich and Food to Go Industry Awards
(‘The Sammies’), where we not only won chain retailer
of the year, but also the healthy eating award for our
Sweet Potato Bhaji and Rice Salad Bowl.
Safer planet
Our 2040 net zero carbon target is now fully embedded into
our business processes, meaning it has gone from a set of
plans to an actionable programme of work, with data outputs
that we can – and do – scrutinise each month. To keep
everyone focused, our Scope 1 and 2 emissions targets form
part of the latest three-year long-term incentive schemes
for our leaders.
Decarbonising our business is no small feat and we continue
to work with experts such as the Carbon Trust to inform and
guide our decisions. Over time, seemingly small actions
aggregate to have a big impact, as we have seen by switching
the refrigerant gas we use to top up our coolers, swapping
to double-deck trailers, or migrating our company car fleet
to hybrid or electric models.
We did more work in 2023 to understand our Scope 3
emissions and will complete the next part of our supplier
engagement plan in the year ahead. Our suppliers are vital
partners in this journey and we are already working in
partnership with many of them to see what we can
collectively do next.
This year, for instance, we began using flour made from
Wildfarmed wheat to make some of our wholemeal products.
This flour is made from wheat that is grown following
regenerative farming practices and standards that prioritise
soil health, soil condition, and farm biodiversity by using low
input farming methods.
Another example comes from work with our suppliers of
milk and refuse collection, Müller and Biffa. Our milk bottles
are separately disposed of with other dry mixed recycling,
Biffa convert this into food grade pellets, some of which are
then sent to Müller to be extruded into new bottles for us
containing 30% recycled content.
Today, 97% of the electricity and 30% of the gas we purchase
comes from certified renewable sources. Ultimately, we
want to stop using natural gas for baking and diesel for
transportation and, in 2023, began discussions with a
potential green hydrogen supplier to explore the feasibility
of powering our manufacturing sites and logistics fleets
with green hydrogen.
CHIEF EXECUTIVE’S REPORT CONTINUED
896
Greggs Foundation Breakfast Clubs
£650,000
donated to local communities from our Outlet shops
21Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
workforce at the entry level, which historically has been
disproportionately female. A gender pay gap remains, in part
because of having more males than females in our most
senior roles and Supply Chain roles where shift premiums
apply, but also because we still have more females than
males in our hourly-paid Retail roles.
This year, we report on our Ethnicity Pay Gap for the first
time. We publish figures for both 2022 and 2023 which reveal
a small gap that is largely static year-on-year. We continue
on our journey to embrace diversity in Greggs following our
achievement of the National Equality Standard in 2021.
We continue to support and grow our diversity and inclusion
networks, set up to give a voice to our different communities.
The four groups – focused on Ethnicity, Disability Inclusion,
LGBTQ+, and Women’s development – provide a safe space
for discussion and debate, and help to shape the business.
This year, among other things, their advocacy has led to a
new policy on transitioning at work, activities to mark Deaf
Awareness week, and input into an online learning module
on our zero-tolerance approach to harassment.
Looking ahead
Our strong growth during these tough years for the British
economy gives me great optimism for the years ahead. Back
in 2021, we were bold when we set out our ambition to double
our sales by 2026 but we are ahead of our plan and have
proven that our strategy to open new shops, extend into the
evening, and build up our digital presence is a successful one.
Our brand is stronger than ever before, with more people
coming to us more often in more locations to enjoy the UK’s
favourite sausage roll, bacon breakfast roll, sweet potato
bhaji and rice salad bowl or doughnut. Our range gets more
enticing every year, with more healthy options, more hot food,
and new flavours to tempt our customers. That spirit of
innovation continues into 2024 with new product trials
and roll-outs planned.
We are confident that Greggs
can deliver another year of good
progress as we continue our
plans for sustainable growth.
We now employ 32,000 people across the country, and I credit
them with our success. It is their passion for creating great
food at affordable prices, and their commitment to delivering
warm and friendly service, that makes Greggs the hugely
popular destination that it is.
As their Chief Executive, I remain fully committed to enabling
our people to fulfil their potential and build the career with us
that they want. Just as we work hard to win and keep the
loyalty of our customers, we work hard to win and keep the
loyalty of our colleagues too.
Together, we will continue to grow this brilliant business, while
sharing our success with our colleagues and communities.
As we thrive, we can open more Greggs Foundation Breakfast
Clubs and Outlet shops, raise more money for charities, and
do more work to decarbonise food retailing. In our small way,
we are making the world a better place.
Current trading and outlook
Greggs has started 2024 well, with like-for-like sales in
company-managed shops growing by 8.2% in the first
nine weeks. As we have previously reported, inflationary
pressures are reducing and we have improved visibility
of costs in the coming year. There is no change to
management’s expectations for 2024, and we are confident
that Greggs can deliver another year of good progress as we
continue our plans for sustainable growth. I am enormously
proud of what we are already achieving and excited about
what’s ahead.
Roisin Currie
Chief Executive
5 March 2024
The equipment we choose to put into our shops is under
scrutiny too. We test in-store sustainability initiatives in
our Eco-Shop and, during 2023, started the roll out of seven
new items – Unisan bins, knee-operated sinks, a prep bench,
microwave, fridge, freezer, and oven. The new model
microwave has an anticipated lifespan twice that of our
previous choice and is now utilised to warm our soup in a
more efficient way. We have therefore removed our soup
kettles, heating soup to order instead which uses around
1/20
th
of the electricity previously consumed.
Our colleagues are also a source of new ideas. This year,
we ran the Greggs Sustainability Challenge with our waste
partner Biffa, inviting our people to propose pioneering
sustainability initiatives. Ideas included enriching local
ecosystems, a community kitchen garden, plastic reduction
initiatives, and engagement forums. The winners will see
their ideas become reality.
Better business
I am proud to lead a Board with excellent female
representation on it; we have already met the FTSE Women
Leaders 2025 target of 40%. Across the business, women
made up 64% of our total workforce and half of our
management population in 2023. Our gender pay gap is
reducing, predominantly driven by getting a more balanced
22
OUR STRATEGY
ENSURING
GROWTH IN THE
YEARS AHEAD
Our vision is to be the customers’ favourite for food-on-the-go. While we’ve
enjoyed tremendous success in recent years, our journey is far from over.
We have an ambitious plan to double Greggs’ sales and while the fundamental
strategic pillars of our business model have not changed, we are continually
learning and adapting. To reach our full potential in the years ahead, our strategy
is focused on four key drivers of growth and underpinned by investment in our
Supply Chain and technology.
GREAT TASTING,
FRESHLY PREPARED FOOD
You cannot beat freshly baked, freshly prepared
food. With our great flavours, responsibly-sourced
ingredients, consistent quality and outstanding
value, our food-on-the-go leads the way.
COMPETITIVE SUPPLY CHAIN
By owning our Supply Chain, we’re able to make
our tasty products and transport them to our shops
ourselves – offering our customers great-quality
food that delivers the best possible value for money.
BEST CUSTOMER EXPERIENCE
Fast and friendly service is a key reason why
customers choose Greggs. Great service is not an
easy thing to deliver under pressure, and our shop
teams do an amazing job. Through our Greggs App,
we are able to build long-lasting relationships with
our customers and reward their loyalty.
FIRST-CLASS SUPPORT TEAMS
We’ve invested heavily in leading-edge systems
and technology. They equip our support teams to
provide the best service to their colleagues and,
ultimately, to our customers.
Our fundamental strategic pillars The Greggs Pledge: Dedicated to doing good
STRONGER,
HEALTHIER COMMUNITIES
We pledge to play our part in improving the nation’s
diet, providing free breakfasts to schoolchildren,
supporting families in hardship and giving surplus
food to those who need it most.
BETTER BUSINESS
We pledge to increase the diversity of our workforce
and to use our purchasing power responsibly, with
the aim of making things better in our Supply Chain.
SAFER PLANET
We pledge to become a carbon-neutral,
zero-waste business.
23Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Our key drivers of growth
GROWING AND
DEVELOPING THE
GREGGS ESTATE
With a strong pipeline of new shop openings alongside a
significant opportunity to improve the quality of our estate
through relocations and the next generation of shop refits,
our ambition is to reach significantly more than 3,000 shops
across the UK.
Read more on page 24
BROADENING
CUSTOMER APPEAL
AND DRIVING LOYALTY
We continue to successfully reposition the Greggs
brand to become recognised as a customer favourite for
food-on-the-go. Through our brand activity, and with timely
and effective customer communication via our Greggs App
and website, we have the opportunity to effectively
communicate how Greggs can be a brand considered
by more people, in more places and at all times
of day when customers need food-on-the-go.
Read more on page 30
EXPANDING
OUR EVENING
TRADE
Through extending the trading hours in many of our shops,
delivering new and exciting additions to our menu and
leveraging our existing customer channels – both walk-in
and digital – we have a strategic opportunity to effectively
compete for food-on-the-go sales in the evening.
Read more on page 26
DEVELOPING
OUR DIGITAL
CHANNELS
Through our digital channels, we are able to compete
more effectively at all times of day. Our delivery
partnerships with Just Eat and Uber Eats enable us
to increase the reach of our shops beyond customers
passing by and, in addition, offer the added attraction
of serving multiple customers in one order with
higher-than-average basket size. Our Click + Collect
service offers our customers the ability to easily browse
our menu, skip the queues and personalise their order.
Read more on page 28
INVESTING IN OUR
SUPPLY CHAIN AND
TECHNOLOGY FOR
A BIGGER BUSINESS
Underpinning our ambition to double sales is significant
investment in manufacturing and logistics to increase
capacity. Building a centralised business model has required
a transformational investment in systems and technology
and we continue to accelerate our digital transformation
programme. We see significant opportunities to grow our
digital capabilities and enable more efficient operations
through a programme of continuous improvement as the
business grows.
Read more on page 32
24
OUR STRATEGY IN ACTION
GROWING OUR ESTATE
Our ambition is to reach significantly more than 3,000
shops and we have a strong pipeline of new shops
opening. We also have a significant opportunity to
improve the quality of our estate through relocations
and the next generation of shop refits.
GROWING
OUR ESTATE
25Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Greggs is a versatile brand. That means we can open a full
range of formats in a variety of locations, with our digital
channels enabling us to extend the reach of each shop
even further.
Our mission is simple – we want Greggs to be accessible,
wherever, whenever, and however our customers need us.
And by ensuring our shops are the best they can be, our
customers have a brilliant experience when they visit us.
As well as opening new shops, we want our existing shops
to be bigger and better, which means improving all of our
shops through our next generation of shop refits. It also
means moving some shops to better locations.
New shop openings
When a customer is choosing where to shop for food-on-the-go,
we know that convenience is the key consideration. We already
have a strong presence in traditional towns and suburban
locations, so will continue to focus on increasing our presence
in locations where people travel, work, and/or access by car.
2023 was another record year as we accelerated our shop
opening programme – with 220 gross shop openings and
145 net new shops, growing the estate to 2,473 shops.
We have a strong pipeline and exciting new locations in
development for 2024.
We continued to grow our presence in central London,
opening new shops in high footfall areas and travel hubs,
including Canary Wharf and Waterloo Stations, City Road,
Greenwich Peninsular, and the Westfield Centre in
Shepherd’s Bush. We opened four of our new ‘Tasty by
Greggs’ café format shops within Primark stores in
Newcastle, Bristol, Liverpool and Leeds. Following a
successful trial with Tesco in 2020, we rolled out our
partnership to a further 17 shops, and also opened five
shops with new partner Sainsbury’s. We opened a record
15 drive-thru shops, including our first 24-hour operation
in Bolton, and took Greggs to new heights with openings
at Gatwick and Glasgow Airports.
Bigger and better shops through
refits and relocations
In addition to growing our estate through new shop openings,
we are improving the quality of our existing shops through
our ongoing programme of shop refits and relocations. In
2023, we continued to evolve and refine our refit designs,
maximising space and increasing our capabilities in food
preparation; this has enabled us to realise the potential of
both our delivery and Click + Collect digital channels, whilst
also offering the best experience for walk-in customers.
Driven by our commitment to making our national network
of shops the best they can be, we completed 42 relocations
and 122 refits. By moving additional shops to larger, better
premises, we were able to increase coffee shop seating
and grow our multi-channel offer. Relocations will remain
a strategic priority as we aim to strengthen our estate,
and we have a strong property pipeline for 2024.
Increasing customer reach through
our franchise and wholesale partners
Our partners play an important role in providing access to
restricted locations such as motorway service areas, petrol
filling stations and other closed catchments. We were proud
to celebrate the opening of our 500
th
franchised shop this
year, in East Lothian, with our partner MFG.
In 2023, we welcomed EG on the Move and Sodexo on board,
bringing the number of franchise partners to 16 with 503
franchise locations.
Our highly successful 12-year partnership with Iceland
continues and, in 2023, we extended our limited-edition
rotational range with the launch of the Chicken Katsu Bake
and the Vegan Mexican Bake.
2024
PLANS
The pipeline of new shop opportunities
remains strong, and we expect to open
between 140 and 160 net new shops in
2024, including drive-thrus, in travel
hubs, and at supermarket locations;
we estimate that around a third of
these will be with franchise partners.
We will also focus on providing bigger
and better shops to serve all channels,
by targeting around 50 relocations and
150 refits.
As part of our ongoing commitments
set out in The Greggs Pledge, we plan
to open more Greggs Outlet shops and
continue the roll-out of our Eco-Shop
elements.
220
record new shops opened in the year
122
refits completed in 2023
26
OUR STRATEGY IN ACTION CONTINUED
EXTENDING EVENING TRADE
We have a strategic opportunity to
compete for food-on-the-go sales
in the evening and are extending the
trading hours in many of our shops,
adding new and exciting items to
our menu and leveraging all of our
customer channels.
EXTENDING
EVENING
TRADE
27Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
596
shops open for delivery after 6pm
We have made excellent progress with our five-year evening
trading growth plan and now have more than 1,200 shops
trading to 7pm and beyond.
We grew evening sales in 2023 without adding complexity
to our shop operations. We will further explore our evening
menu proposition to meet customer expectations for both
walk-in and digital channels, which we believe will make this
opportunity even greater.
Our delivery partnerships
In 2020, we launched our partnership with Just Eat and,
since then, have rolled it out to 1,360 shops nationwide.
In October, we welcomed Uber Eats on board as our second
delivery partner. We currently have more than 700 shops on
the Uber Eats platform and look forward to maximising the
opportunities that lie ahead as we extend our reach and
further grow the delivery side of our business.
Around 600 of our evening shops now offer a delivery service
after 6pm via Just Eat or Uber Eats. Offering home delivery is
key to our plans for extended trading and we intend to further
expand delivery in the coming year, adding more locations
and menu choices to strengthen our proposition at every
meal occasion.
24-hour drive-thrus
Since the launch of the first Greggs drive-thru six years ago,
this shop format has rapidly gained popularity, and we now
have 34 around the UK. We opened our first 24-hour
operation in Bolton just off the M61, exemplifying our focus
on placing drive-thru shops on main arterial routes with
significant traffic volume.
Drive-thru shops such as Bolton and our unit at Meadowhall
in Sheffield, are conveniently located and open around the
clock, catering for evolving consumer habits, and particularly
for the needs of shift workers. Extending the trading hours
at our drive-thrus is part of our strategic growth plan, and we
plan to enhance our evening menu with a focus on hot food.
Menu development
Our existing range continues to perform well in the evening;
we have introduced new and exciting hot products that could
have day-long appeal such as the Mozzarella and Cheddar
bites and are trialling made-to-order Hot Chicken Wraps.
We continue to offer hot sweet treats in the evening, making
these core products appealing to the evening market, and
our hot Yum Yums, Brownies and Cookies served with a
chocolate or salted caramel dipping pot remain popular
with customers.
Southern Fried Chicken Goujons, Spicy BBQ Chicken Bites
and pizza sharing boxes alongside our single slice and meal
deal offers are also selling well. We added a Spicy Veg Pizza
to the range on our digital channels, building our non-meat
offering in the category.
We also trialled over-ice drinks, including the Iced Latte
and Iced Cloudy Lemonade. Over-ice drinks performed well,
particularly throughout the summer months with sales
growing week-on-week, and they are now available in over
20 shops with wider roll-out plans for 2024.
8.2 million
delivery orders fulfilled
2024
PLANS
We will further explore our evening
menu proposition to meet customer
expectations for both walk-in and digital
channels.
We will look for ways to reward evening
customers and expect evening to remain
our strongest-growing daypart in the
year ahead.
28
OUR STRATEGY IN ACTION CONTINUED
DEVELOPING DIGITAL CHANNELS
DEVELOPING
DIGITAL CHANNELS
Our digital channels provide the
strategic opportunity to compete
more effectively at all times of
the day. Our delivery partnerships
enable us to increase the reach of
our shops, and Click + Collect offers
our customers the ability to easily
browse our menu, personalise their
order, and skip the queue.
29Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
When the pandemic hit in 2020, we rapidly accelerated
our multi-channel development strategy to enable our
customers to enjoy Greggs at home.
We launched our partnership with Just Eat in January 2020
and welcomed Uber Eats as our second delivery partner in
2023. Delivery now accounts for 5% of sales and offers the
added attraction of serving multiple customers in one order,
with average basket size around three times that of a typical
walk-in purchase.
Digital channels offer a key opportunity for Greggs to
increase market share by increasing menu choice,
multi-channel reach, and customer loyalty.
Delivering success with Just Eat and Uber Eats
With delivery now available in over 1,440 of our shops
nationwide, we remain focused on improving our operational
procedures to fulfil demand as well as enhancing our offer,
to ensure the best possible customer experience.
We have empowered our teams to ‘Fix it Now’, enabling
them to substitute items for customers, instead of rejecting
a delivery order. We have simplified our back-office systems
by merging delivery and Click + Collect orders so that our
shop teams only need to engage with one platform, rather
than dealing with multiple screens.
We have enhanced our offer and built on our reputation
for great value through key promotions and exclusive deals
for Love Island, the FIFA Women’s World Cup, and the UEFA
Champions League. We also celebrated special occasions
with customer giveaways, marking the King’s Coronation
with free sausage rolls, and offering a free pizza slice on
National Pizza Day.
Enhancing the customer journey
In 2023, we made improvements to our operations, ensuring
our customers’ digital journey and experience is the best it
can be.
We made further enhancements to the customer journey on
our popular shop-finder tool, and improved how customers
use rewards on the Greggs App. We also enhanced the
overall payment experience for people using Click + Collect
and our top-up solution by introducing a new payment
provider.
1,440+
shops now have delivery available
Click + Collect
Click + Collect is available through both the Greggs App and
website – enabling customers to easily browse our menu,
skip the queues, and personalise their order. Click + Collect
improves sales by encouraging customers to trade up,
speeds up service by removing payment at the till, and –
by making to order – has the potential to reduce waste too.
In 2023, our priority was to work with our shop teams to
streamline the process, making digital orders as easy
as possible and less time consuming.
2024
PLANS
We will continue to extend the reach
of our existing delivery partnerships,
helping us to fully maximise the at-home
and evening trade opportunities.
Product development, in particular
hot food options, will ensure that
we continue to provide the types of
food-on-the-go that our customers
want, no matter what time of the day
they choose to shop with us.
We will support our shop teams by
further improving and enhancing the
operational requirements of digital
orders, including the rollout of a newly
designed prep table for assembling
digital orders.
3030
OUR STRATEGY IN ACTION CONTINUED
BROADENING CUSTOMER APPEAL AND DRIVING LOYALTY
As well as being a record year for business
performance, 2023 was an excellent year for
our brand metrics as we strengthened our
position as the UK’s leading food-to-go brand
based on YouGov Brand Index scores.
BROADENING
CUSTOMER
APPEAL
31Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Easily accessible throughout the day
Our shops serve millions of customers every day and are
always there to offer great value, freshly prepared food that
fills you up and keeps you going from morning to evening.
So, whether it’s grabbing the UK’s favourite bacon roll and
a freshly-ground Fairtrade coffee for breakfast, picking up
lunch-on-the-go, or having a family sharing-deal delivered
in the evening, Greggs satisfaction is available whenever
or wherever our customers choose.
In 2023, we invested in making the brand mean more to more
people, in line with our business strategy. We aim to keep
Greggs front of mind and provide customers with more
reasons to shop with us more often. We continued to grow
and monitor our investment in paid media as we built out our
channel mix, and delivered unique Greggs brand moments
throughout the year. Highlights included our Fender’s
Unplugged activation in June celebrating Sam Fender’s
homecoming gigs at St James’ Park, and our Greggs Bistro
collaboration with Fenwick that took the UK restaurant
scene by storm and became the must-have reservation
for festive dining in December. Together, these delivered
another record year for our brand health metrics with more
customers than ever considering the Greggs brand and
choosing to shop with us.
Delivering even more value through
digital investment
We continue to develop a range of data-driven and digital
workstreams, bringing more of our capabilities in-house,
and supporting our teams with best-in-class suppliers
and partners.
In 2023, we completed the task of bringing the design,
data and technology capabilities that power our Company
websites in-house, allowing us to deliver a seamless
customer experience across our four Company sites –
greggs.co.uk, our Corporate and Recruitment sites,
and The Greggs Foundation.
Record numbers of customers downloaded the Greggs App,
as we welcomed over three million new users in 2023. Our
ongoing investment in CRM and data capabilities allowed us
to encourage our new and existing customer base to scan
the Greggs App more often when they shop, resulting in a
record level of 15% of total sales being accompanied by a
scan by the end of the year. Millions of customers continued
to enjoy even more value through our ‘buy 9 get your 10
th
item
for free’ loyalty proposition that is applied across all
purchases and product categories.
2024
PLANS
In line with the wider business strategy
and growth drivers, we will continue
to innovate and evolve our brand and
digital strategies in 2024, focusing on
optimising our paid and earned media
investment and brand partnership
opportunities, and building out and
enhancing our digital and data
capabilities.
We aim to keep Greggs front of mind
and will look to deepen the emotional
connection that customers have with
the brand, our products, and service
experience, ensuring we continue to
mean more to more people.
We want to maintain our position as
the most accessible food-to-go brand
in the UK – serving and satisfying more
customers in shops throughout the day
and delivering Greggs experiences that
always bring a smile.
No.1 overall
on the YouGov BrandIndex*
No.1 for value
on the YouGov BrandIndex*
* YouGov BrandIndex, circa 23,240 sample, UK 18+ Nat Rep Total Population –
data collected 01/01/2023 – 31/12/2023, Quick Service Restaurant, coffee shop
and delivery services sector.
32
OUR STRATEGY IN ACTION CONTINUED
INVESTING IN OUR SUPPLY CHAIN AND TECHNOLOGY FOR A BIGGER BUSINESS
Over recent years, we have transformed our
Supply Chain and technology infrastructure
to create a centralised food-on-the-go
business model. Our ambition to double
sales revenues will require significant
investment in manufacturing and logistics
to increase capacity.
We’ve made better use of space and
invested heavily in centralised automation,
delivering a step-change improvement in
the quality of our products and our Supply
Chain cost structure. This has also allowed
us to create a template on which we can
build additional capacity and continue to
grow as a business.
INVESTING
FOR SUCCESS
33Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Increased savoury production capacity
at Balliol Park
Improved operational efficiency and streamlining works,
designed to increase capacity for savoury bakes and rolls
on Line 1 at Balliol Park, continues to be successful and has
been critical to supporting high savoury demand, particularly
during the busy weeks leading up to Christmas. We
completed the development of a fourth savoury line which
is currently being commissioned. Once fully operational,
we expect the production of our savoury bakes and rolls to
increase by around 35%, ultimately increasing our capacity
for volume and growth.
Strategic investment for future growth
Site development work at both our Birmingham and
Amesbury logistics hubs is central to supporting additional
shop distribution capacity, securing the long-term future
of both sites. The restructuring works at our Birmingham
Distribution Centre (‘DC’) are well underway with initial
phases including a larger site freezer to support volume
uplifts. Tendering for the extension of our Amesbury DC has
been concluded and works began on site in November 2023.
Both sites are scheduled for completion in late 2024.
Acquisition of Knights of Old site, Kettering
In Autumn 2023, the opportunity arose to acquire
the Knights of Old site in Kettering when they entered
administration. They had previously supported our own
operations at Kettering DC with warehousing facilities.
We took over the lease and were able to save the jobs
of all those previously employed at the site. This not
only enables business continuity but also enhances
our primary logistics capability in the South.
We have also continued to increase our radial logistics
capacity in the South to support ongoing shop growth
and works are underway to release further capacity in
both Manchester and Leeds.
Driving efficiency and environmental
benefits through double-deck trailers
In 2020, we trialled and purchased our first double-deck
trailers and were so impressed with the results that we now
have 34, with a further 18 arriving by 2025. We use trailers
on our articulated vehicles to transport product across the
country and the double-deck version allows us to carry
56% more goods per load, meaning we need to make fewer
journeys. This reduces our use of fuel and, consequently,
has a positive impact on our Scope 1 carbon footprint.
Continuous improvement to shop systems,
benefitting our colleagues and customers
In Retail, we have continued to evolve our in-shop solutions
to further improve efficiency and actively engage our
colleagues throughout the decision-making process.
As we become a multi-channel business, we continue to look
for ways to improve and simplify our in-shop operations for
our shop teams, and ultimately our customers.
Our new, upgraded till suite is currently being trialled with
plans to begin a full rollout in 2024. This will enable our shop
teams to have a much clearer view of products, a simpler
and easier way to transact, and make the customer journey
at the till more efficient. The new tills will also be integrated
with other digital products, allowing for a consistent digital
experience for customers.
Improved colleague engagement, via The Hub
2023 has seen us introduce a Microsoft Teams
communication platform across the organisation, known
as The Hub. This gives us the opportunity and flexibility to
disseminate information to all colleagues as well as to
engage and collaborate. This is being progressively rolled
out across our Retail and Supply Chain colleagues.
2024
PLANS
2024 will be another big year for our Supply Chain
as we invest in further increasing capacity and
productivity. We will bring the additional
manufacturing line at Balliol Park on-stream,
complete our investments in Amesbury and
Birmingham DCs and in tactical logistics capacity
at Leeds and Manchester manufacturing sites, to
support shop and volume growth.
We will begin to develop two brand new
state-of-the-art sites in the Midlands.
Located in Derby, the first site will provide
additional frozen manufacturing capacity,
including new savoury and sweet production lines,
as well as frozen storage and distribution, which
will be key to our future growth. In addition to
storage, the site will take on the picking of most of
our frozen products and ingredients, down to shop
level. This will be a real step-change, helping us to
drive further efficiencies and improvements in our
processes, and support our plans for shop growth.
We expect this site to be open and operational by
the first half of 2026.
The second new site will be located in the
Kettering/Corby area and will be a new National
Distribution Centre for the storage and
distribution of ambient and chilled goods. As with
the Derby frozen distribution site, this site will be
designed to pick most of our chilled and ambient
lines down to shop level for delivery into our
existing Radial Distribution Centre network. Both
sites will be designed with the opportunity for
future expansion and development front of mind,
allowing us to extend capacity as our shop estate
grows even further. We expect this site to be open
and operational by the first half of 2027.
34
13.5%
-30.5%
51.7%
23.0%
19.6%
2023
2019
2021
2022
2020
9.2%
-36.2%
52.4%
17.8%
13.7%
2023
2019
2020
2021
2022
£145.6
- £13 .7
£148.3
£114.2
£108.3
£167.7
£188.3
2023
2019
2020
2021
2022
89.7p
85.0p
-12.9p
117.5p
114.3p
123.8p
139.2p
2023
2022
2021
2019
2020
KEY PERFORMANCE INDICATORS
We use eight key financial performance indicators to monitor the
performance of the Group against our strategy. The definition of these
KPIs and our performance over the last five years is detailed below.
Details of our non-financial KPIs relating to carbon emissions are
given on page 53.
Results for 2020 were significantly impacted
by the closure of the Greggs shop estate for
most of the second quarter as a result of the
Covid-19 pandemic.
TOTAL SALES GROWTH
19.6%
LIKE-FOR-LIKE SALES GROWTH
13.7%
PROFIT BEFORE TAX (‘PBT’) (£M)
£167.7m
DILUTED EARNINGS PER SHARE (PENCE)
123.8p
What this means
The percentage year-on-year change
in total sales for the Group.
What this means
Compares year-on-year cash sales in our
company-managed shops, excluding any
shops which opened, relocated or closed
in the current or prior year.
What this means
Reflects the performance of the Group before
taxation impacts and the underlying measure
excludes any exceptional items arising in
the year.
What this means
Calculated by dividing profit attributable to
shareholders by the average number of dilutive
outstanding shares (as detailed in Note 8). The
underlying measure excludes any exceptional
items arising in the year.
Why this is important
This is a measure of the absolute growth
of the Group.
Why this is important
This measure provides valuable additional
information on the underlying sales
performance of the business and is
a key measure used internally.
Why this is important
This is a measure of the absolute performance
of the Group.
Why this is important
This measure reflects the underlying earnings
for each share in the Company.
All of the non-GAAP measures (other than
like-for-like sales growth) detailed can be
calculated from the GAAP measures included
in the Annual Accounts. All of the underlying
measures exclude the exceptional items detailed
in Note 4. Commentary on these KPIs is
contained within the Financial Review.
Underlying
Including exceptional items
35Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
£86.0
£58.7
£57.4
£110.8
£199.8
2023
2019
2020
2021
2022
£169.5
£1.5
£236.5
£198 .8
£257.1
2023
2019
2020
2021
2022
£91.3
£106.8
£268.6
£261.6
£265.3
2023
2019
2020
2021
2022
20.0%
19.0%
-2.4%
21.0%
23.0%
2 3.7%
21.1 %
2023
2022
2021
2019
2020
NET CASH INFLOW FROM OPERATING ACTIVITIES
AFTER LEASE PAYMENTS (£M)
£257.1m
RETURN ON CAPITAL EMPLOYED (‘ROCE’)
21.1%
CAPITAL EXPENDITURE (£M)
£199.8m
LIQUIDITY (£M)
£265.3m
What this means
Operating profit adjusted for the impact of
non-cash items, working capital movements
and repayment of the principal on lease
liabilities. The calculation of these figures
can be found on page 164 .
What this means
Calculated by dividing profit before tax by
the average total assets less current liabilities
for the year. The underlying measure excludes
any exceptional items arising in the year.
The calculation of these figures can be
found on page 164 .
What this means
The total amount incurred in the year
on investment in fixed assets.
What this means
This is calculated as cash and cash
equivalents plus undrawn committed
facilities, taking into account required
minimum liquidity covenants.
Why this is important
This represents cash flows that could be
used for distribution of dividends or to fund
our strategic objectives and is reflective of
the strong cash-generative nature of the
business.
Why this is important
This is a measure of the return generated on
capital invested by the Group and provides a
guide to how efficiently we are generating profit
with the assets used in the business.
Why this is important
This reflects the ongoing investment
in the business over time.
Why this is important
This measure provides useful information
on the Group’s net financial position.
3636
Our people are what makes Greggs successful. We want
to provide a great place to work, where our colleagues
feel valued, can be themselves, and want to stay with us –
and a business where new people are excited to join us.
Our culture and our values are what makes Greggs, Greggs.
As we grow, we keep these at the heart of every decision
we make. We talk about our unique culture being our ‘secret
sauce’, because when people enjoy coming into work,
they do a better job, and that makes Greggs a stronger,
better business. We concentrate on treating people well,
supporting their development and wellbeing, and valuing
everyone’s contribution.
OUR
PEOPLE
OUR PEOPLE
37Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Listening to our colleagues
Listening to our colleagues and engaging with them to hear
their views and opinions is key to ensuring that everyone
feels valued. We do this in a variety of ways:
Your Opinion Matters
More than 24,000 of our colleagues took part in our annual
engagement survey ‘Your Opinion Matters’, telling us what
is working well and what could be improved. With an overall
engagement score of 74%, and the majority of colleagues (76%)
saying they would recommend Greggs as a great place to work,
we know our people are motivated and committed. While
our 2023 score showed a slight decline (of 3%) versus 2022,
we continue to outperform the UK retail benchmark by 7%.
76%
of colleagues recommend Greggs
as a great place to work
Through our colleague engagement survey, we
cross-reference responses with self-declared demographic
data (ethnicity, gender, sexual orientation and disability),
and we are pleased to report that overall levels of
engagement are similar to those reported for the
whole responding population.
A voice in the Boardroom
Throughout 2023, the Operating Board welcomed
colleagues from each of our teams to share the activities and
actions in place locally to support colleague engagement.
This continues to form an important part of our engagement
agenda for 2024.
The Board regularly engages with our colleagues through
their attendance at a variety of listening groups across
Retail, Supply and central support teams as well as visits
to our shops and Supply sites. Find out how the Board has
engaged with all stakeholders in our s172 statement on
pages 75 to 79 .
Union relationship, structure and engagement
As part of Greggs’ longstanding national recognition
agreement with the Bakers Food and Allied Workers Union
(‘BFAWU’) and Union of Shop, Distributive and Allied Workers
(‘USDAW’) in Scotland, regular meetings are held covering
a variety of topics, including trading, strategic initiatives,
The Greggs Pledge, and annual pay negotiations.
The Greggs Negotiating Committee (‘GNC’) is our national
union forum and is attended by the General Secretary of
the Bakers Food & Allied Workers Union, a colleague
representative from USDAW, and union representatives from
across our business. We have two regional forums, the Retail
Partnership Forum and Supply Partnership Forum to discuss
operational issues across the Retail estate and our Supply
sites which are attended by union representatives from
these areas of the business. More locally, every Retail region
and Supply site has a Joint Consultative Committee where
we discuss matters which are specifically relevant to that
region or site.
Your Ideas Matter
We invite colleagues to share their ideas on an internal
platform, ‘Your Ideas Matter’. Ideas can be submitted across
any topic relating to Greggs, and every idea is responded to
and can be reviewed and rated by colleagues. During 2023,
1,614 ideas were submitted ranging from product and
packaging innovations to process improvements.
The Hub
In 2023, we successfully piloted our new colleague
communication solution ‘The Hub’ utilising Microsoft Teams.
It can be accessed either via a Greggs device or through a
personal device if colleagues choose to do so. The Hub
includes our very own Greggs news feed where authors across
the business create and post news about what is happening at
Greggs. We also use ‘The Hub’ to celebrate events and share
colleagues’ stories as part of our ‘Being Inclusive’ and
‘Balanced You’ calendars. We will be developing this solution
further during 2024 with the ambition of reaching all
colleagues.
38
OUR PEOPLE CONTINUED
Embracing diversity
We are proud that we achieved the National Equality
Standard in 2022 and, since then, have continued to support
and embrace diversity across Greggs.
Colleague inclusion networks
Our three inclusion networks, each of which has two Operating
Board sponsors, have developed further during 2023 and
have each worked on establishing their network’s name and
purpose. They continue to provide a safe space for minority
communities and allies, as well as supporting our diversity
and inclusion agenda by sharing feedback, celebrating events,
and taking an active part in the delivery of training.
I knew from the minute I came for the
interview that it was a completely different
place to work from anywhere that I’d been
before. To work somewhere that has people
at the forefront of what they do just makes
it such an amazing experience.
Ash Akram
People Support Team Leader
ENABLE
(Equality, Nurture,
Adjustments, Barriers,
Learning, Everyone)
We exist to make sure Greggs is an inclusive
workplace for colleagues living (directly or indirectly)
with disabilities, mental or physical illness,
neurodiversity, and/or caring responsibilities.
We want to enable a great career at Greggs.
Highlights of the year:
• Supported communications relating to Deaf
Awareness Week with a ‘sign a day’ campaign;
• Developed an approach to support colleagues
living with, or impacted by, disability, long-term
ill-health, or caring responsibilities.
PRIDE
(Protect, Represent,
Impact, Develop,
Engage)
We exist to make sure Greggs remains a great
place to work, no matter your gender identity
or sexual orientation.
Highlights of the year:
• Supported the development of our
transitioning at work policy;
• Updated our uniform ordering processes to
ensure all options are available to all colleagues,
regardless of gender;
• Supported digital campaign to recognise
Pride across seven city centres.
REACH
(Race, Ethnicity and
Cultural Heritage)
We exist to work together to share knowledge
and spread awareness on race, ethnicity, and
cultural heritage.
Highlights of the year:
• Created guidance to support our
Retail colleagues through our
Zero Tolerance campaign;
• Played a key role in the development
of our online learning module about
our Zero Tolerance approach.
39Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Building and nurturing an inclusive Greggs
Following the success of our Inclusive Leadership
programme for our senior and middle managers, we
committed to deliver Inclusive Management training to our
Shop Managers, Supply Site Supervisors and Greggs House
Team Leaders in 2023. In total, 1,575 colleagues (73% of
eligible colleagues) attended a workshop, successfully
facilitated by Managers and supported by the People Team.
The sessions focused on how to be an inclusive manager,
developing an awareness of how personal experience and
views can shape management styles. They also provided
an opportunity to consider what they and their teams can
do to be more inclusive of each other.
Ensuring diversity across our development
programmes
During 2023, we identified two key programmes within our
Career Pathways which offered the greatest opportunity
for a diverse range of applicants, to support our ambition
of creating a more ethnically diverse talent pipeline:
• Aspiring Leaders – designed for colleagues who have
the potential to progress into a management role;
• Future Shop Leaders – our programme aimed at our Shop
Supervisors with the potential to become a Shop Manager.
We analysed the diversity data for the applicant pool for
both programmes to better understand the demographics
in each area of the business. We then delivered engagement
sessions with leaders to support great career conversations,
overcome any real or perceived barriers, and actively
encourage applications from colleagues from an ethnic
minority background.
During 2024, we will provide enhanced support for colleagues
from an ethnic minority background who are participating in
either of these programmes through a mentoring scheme.
Achieving greater ethnic diversity
We recognise that we need to work harder to achieve greater
ethnic diversity in our management population, and on into
the most senior roles in business. As we have outlined, we
are fully committed to this through ensuring diversity across
our career pathway programmes and providing mentoring
opportunities.
By the end of 2027, we want people from an ethnic minority
background to make up 6% of our senior management level
defined as our Operating Board and those in management
positions reporting directly to them. We defined this target
after reviewing data from the most recent census for the
North East of England (where the majority of our senior
management roles are located), as well as data on the ethnic
diversity of the UK retail sector, and the ethnic diversity of
our talent pipeline. When we consider our current
representation at the senior management level, and the
potential vacancy opportunities, we feel this target is
stretching but appropriate.
1,575
leaders in Greggs attended Inclusive
Management training in 2023
40
OUR PEOPLE CONTINUED
Female Male
Ethnically
diverse
Board 3 4 1
Senior Managers
1
22 28 1
Senior Managers
2
57 76 2
Other Managers 299 308 34
All colleagues 20,322 11,320 5,419
1 Defined as Operating Board Directors plus Senior Managers directly reporting
into an Operating Board Director.
2 All Senior Managers.
Notes:
• For the purposes of this report, Senior Managers are
defined as Operating Board plus Managers directly
reporting into an Operating Board Director.
• Headcount figures as at 30 December 2023. 63.8%
of total workforce is female (20,322, of 31,839).
• As an inclusive organisation, we recognise all gender
identities and understand that not all our colleagues
will identify as male or female. There are 197 colleagues
whose gender is recorded as ‘Other’, ‘Unknown’ or
‘Undeclared’ hence the total figure of 31,839 is not
the sum of the female and male totals.
Championing women in our workforce
We are proud of our reputation for bringing the best talent
through the business regardless of gender and the fact that
64% of our total workforce is female. Women make up half
of the total management population at Greggs and hold
43% of our senior management roles. We have great female
representation on our Board too, and have already achieved
the external FTSE Women Leaders target of 40% by 2025.
Our Women’s Development Network, which has been
running since 2018, continues to flourish and has now had
53 participants with over 35% of attendees being promoted
into more senior roles in the business.
Pay gap reporting
In 2023, our mean gender pay gap was 10.49% (down 4.15% on
2022) and our median gender pay gap was 3.24% (up 0.43%).
Like many similar organisations, our gender pay gap is a
consequence of having more males than females in our most
senior roles, more females than males in our hourly-paid
Retail roles, and more males in our hourly-paid roles in
Supply Chain where shift premiums are applicable.
Our Ethnicity Pay Gap report shows the difference in the
average hourly rate of pay of ethnically diverse colleagues
compared to that of white colleagues. We committed to
publishing our ethnicity pay gap for the first time this year
and, to allow for year-on-year comparisons, we have
calculated this for both 2022 and 2023. Our 2023 mean
ethnicity gap is 5.78% (vs 5.37% 2022) and our median
ethnicity pay gap is 2.13% (vs 1.54% 2022).
Further details will be available in our 2023 Pay Gap Report
which will be published in due course.
Supporting people to have a ‘Fresh Start’
Our Fresh Start programme proactively offers training and
work experience to people transitioning into work who we
would not ordinarily meet, including care leavers, people
who have been unemployed for a long time, or those leaving
the armed services or prison. We provide employability
workshops, mentoring, mock interviews, placements and
– most importantly – sustainable job opportunities to these
candidates. Since launching the programme in 2013, we have
placed more than 330 Fresh Start candidates in permanent
roles – 15 of whom have since moved onto a management or
supervisory role. In 2023, we were delighted to celebrate the
first ten-year service milestone for a colleague who joined us
through the programme.
Jeannette’s story
I was one of the first Fresh Start candidates when
I joined Greggs in 2013. I was introduced to the
Fresh Start programme while I was in HMP East
Sutton. Following my interview, I was selected
and started my training before my release.
I was released from prison on a Friday and went
straight into a homeless unit. They found me a
room and I started working at Greggs the following
Monday as a Team Member in the Chatham shop.
I then worked my way up to become a supervisor
and I spent some time as a Shop Manager too.
Celebrating my 10 years’ service this year is a great
achievement. It’s so important for those of us who
have made a mistake, realised that and want to turn
our lives around to be accepted and feel part of the
team. I love Greggs, they give people a second
chance; you’re not judged. It’s the best thing that
ever happened to me.
We are also very proud of our partnership with Workfit,
an organisation that supports people with Downs Syndrome
to access employment opportunities. Since the start of
our relationship, we have offered 24 permanent roles to
candidates who completed successful work placements
with us.
Our employability programmes are good for individuals and
we know they have a positive impact on their families and
communities too – as well as on our wider colleague base.
41
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Supporting our colleague
health and wellbeing
We care about our colleagues’ health, social wellbeing,
and their life both inside and outside of work. We encourage
everyone to look after their health and wellbeing so that they
can enjoy a happy, healthy, and active lifestyle.
Our health and wellbeing strategy – which we call
‘Balanced You’ – shares information and promotes activities
in four main areas: healthy eating and drinking; keeping
active and physically well; support and community; and
positive mental wellbeing.
We have a Balanced You Steering Group which is sponsored by
two Operating Board Directors and includes representation
from across the business at a senior level. The purpose of
this group is to design and support the implementation
of our health and wellbeing strategy.
We have Balanced You Advocates in each area of the
business, who support colleagues by sharing information
and arranging activities to look after our health and
wellbeing. This year, we have focused on the development
of our Advocates and held two sessions covering listening
skills, menopause awareness training, the support services
available through our Employee Assistance Programme, the
work of The Greggs Foundation, and Wellness Action Plans.
We also launched a new health and wellbeing app available
to all Greggs colleagues. It provides fast, direct access to
health and wellbeing support with a fully integrated
Employee Assistance Programme.
We have a suite of digital learning modules designed to
support both colleagues and line managers to recognise
signs and symptoms of mental ill health, support
conversations, and signpost to the available support,
all of which is supported by our mental health policy. In our
‘Your Opinion Matters’ survey, 81% of our colleagues told us
that they are aware of the mental health support provided
by Greggs and know how to access it.
During 2023, we launched an online learning module on
menopause awareness, which has been completed by
88% of colleagues, along with virtual menopause cafés for
colleagues to connect, share, and learn from each other.
Colleagues can also access modules linking financial
wellbeing to the support available through our Employee
Assistance Programme, helping to highlight some of the
key benefits available to colleagues.
Developing our people
Greggs continues to be a Company in growth, meaning
we need a strong pipeline of great people who can build a
successful career in Greggs and support us on our growth
journey. This means making sure we are supporting and
developing our people so they can become the very best
version of themselves. We have a series of robust
development programmes that support our colleagues,
tailored to the different areas of the business, and different
level of responsibility. These, combined with our succession
plan process, means we can meet the needs of our people
and the needs of our growing business.
In Retail, we run two key development programmes:
Future Area Leaders, and Future Shop Leaders. We also
offer our colleagues opportunities to run their own shop or
area, helping to build confidence and skillset. During 2023,
we promoted 466 Team Members to Shop Supervisors,
over 400 Shop Supervisors to Shop Managers, and nine
Shop Managers were promoted into Area/Trainee Manager
roles. In Supply, our striving for excellence programme has
supported the development of over 135 colleagues and in
2023, seven colleagues achieved a promotion following
completion of the programme.
In 2023, we commenced our Graduate Programme,
which supports existing colleagues to move into a
two-year development programme. We also expanded
our Apprenticeship scheme to include opportunities in
Procurement and Food Technology, and launched over
170 digital learning modules across the business.
For our management teams, we run Career Pathways
programmes and, in 2023, more than 160 colleagues
participated in our ‘Aspiring’ and ‘Developing’ leaders’
programmes with over 170 signed up to the programmes
running in 2024.
466
Team Members promoted to Shop Supervisor in 2023
407
Shop Supervisors promoted to Shop Manager in 2023
42
OUR PEOPLE CONTINUED
Rewarding our colleagues
Ensuring colleagues share in our success
We believe that rewarding colleagues for their contribution
and allowing them to share in the success of the business
is critical to support our growth. Each year, 10% of profits is
shared with colleagues who have at least six months’ service.
Paying our colleagues fairly
Every year, to determine the annual pay award, we undertake
negotiations with the relevant trade unions representing
those colleagues covered by a collective bargaining
agreement. Following the successful conclusion of the
resulting ballot, our Retail, Supply and Support teams receive
a pay increase with effect from January in any year.
The 2024 pay award agreed for our wider workforce
consisted of a base pay rise of 8.0%, with an additional 1.6%
(9.6% in total) for our hourly-paid Retail colleagues.
We pay our Retail and Supply colleagues weekly, which
helps them with budgeting and managing their bills on a
week-to-week basis. We do not offer zero hours contracts,
and we regularly review worked hours, increasing contracts
for colleagues where they have consistently worked above
their contract base and wish to increase their contractual
hours. We are proud to be one of the few employers that
continues to provide paid breaks.
Supporting our colleagues to save for their future
To support colleagues to save for their future, we increased
our matched contribution rates for our Greggs pension,
meaning that all our colleagues can now access up to 6%
employer contributions.
Enabling our colleagues to own ‘shares’
in the business
During 2023, we provided the opportunity for colleagues to
participate in colleague share ownership schemes through a
Sharesave plan, giving them the opportunity to save for three
years and purchase shares at a 20% discount. We also have a
Share Incentive Plan (‘SIP’) which coincides with the payment
of profit share to provide colleagues with the option to invest
in Greggs. Across these schemes we have 5,426 participants,
which represents a third of the eligible colleague population.
We are committed to increasing colleague participation in
our Shareplans to support retention and engagement and
will be reducing the length of service requirement for both
schemes from twelve to three months in 2024.
Supporting our colleagues as their families grow
We aim to provide inclusive benefits which support our
colleagues and their families. This year, we were delighted
to further enhance our maternity, adoption, and paternity
pay for colleagues which included increasing the period over
which colleagues receive full pay and reducing the length of
service requirement to one year.
Helping our colleagues make their money go further
All our people can now access their colleague discount
through the Greggs App. 75% of colleagues now access their
discount in this way, enjoying 50% off Greggs products and
25% off branded products. Our colleagues also have access
to our wellbeing partner Unum’s ‘Lifeworks’ app, which
unlocks customer rewards, and enables them to access high
street and supermarket discounts to support them with their
everyday costs. To help our people in Retail with the cost of
living, we have extended our ‘ Magic Bag’ scheme, giving
them big discounts on any unsold product at the end of
each trading day.
43Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
SUSTAINABILITY REPORT
THE GREGGS PLEDGE
In February 2021, we launched The Greggs Pledge,
which declared ten commitments to help make
the world a better place by the end of 2025,
and beyond.
We have always been committed to doing the right thing, but
we wanted to be more specific about how we channel our
efforts and resources into doing good. We reflected on what
we could do to have the most positive impact on the world
around us, and chose to dedicate our efforts to three areas:
communities, the planet and our approach to business.
We have set ourselves ten stretching targets to be achieved
by the end of 2025. Each of our pledges aligns with at least
one of the UN Sustainable Development Goals (‘SDGs’).
STRONGER, HEALTHIER
COMMUNITIES
We pledge to provide free breakfasts to
schoolchildren, give surplus food to those most in
need and play our part in improving the nation’s diet.
1. Growing Greggs Breakfast Clubs: By the end of 2025,
we will support 1,000 school Breakfast Clubs providing
some 70,000 meals each school day.
2. Putting an end to food waste: By the end of 2025, we will
create 25% less food waste than in 2018 and will continue
to work towards 100% of surplus food going to those most
in need.
3. Supporting our communities: By the end of 2025, we will
have 50 Greggs Outlet shops providing affordable food in
areas of social deprivation, with a share of profits given
to local community organisations.
4. Helping our customers make healthier choices:
By the end of 2025, 30% of the items on our shelves will be
healthier choices, and we will attract customers through
education and promotions.
SAFER PLANET
We pledge to become a carbon-neutral,
zero-waste business.
5. Going carbon neutral: By the end of 2025, we will
be on our way to achieving carbon neutrality by using
100% renewable energy across all of our operations.
6. Building the shops of the future: By the end of 2025,
25% of our shops will feature elements from our
Eco-Shop ‘shop of the future’ design.
7. Using less packaging: By the end of 2025, we will use 25%
less packaging, by weight (as a % of sales), than in 2019
and any remaining packaging will be made from material
that is more easily recycled.
BETTER BUSINESS
We pledge to increase the diversity of our workforce,
and to use our purchasing power responsibly, with
the aim of making things better in our Supply Chain.
8. Embracing diversity: By the end of 2025, our workforce
will reflect the communities we serve.
9. Sourcing sustainably: By the end of 2025, we will have
a robust, responsible sourcing strategy in place and will
report annually on progress towards our targets.
10. Protecting animal welfare: By the end of 2025, we will
secure and maintain Tier 1 in the BBFAW Animal Welfare
standard.
44
OUR PROGRESS SO FAR
BY THE END OF 2023…
896 Breakfast Clubs, fed over
62,000 children every school day.
We reduced the amount of
food waste we create in our
manufacturing operations by
a further 10% and increased
food redistribution to 41.8%
(vs a target of 48%).
We have 35 Greggs Outlet shops. We maintained over 30% of
our range as ‘Healthier Choice’
products.
97.1% of the electricity and
over 30% of the gas we used
across our operations is from
renewable sources.
Over 500 shops (21% of our estate)
feature Eco-Shop elements.
87% of our own-brand packaging
can be more easily recycled.
We published our Ethnicity
Pay Gap Report* and provided
enhanced support for colleagues
from an ethnic minority
background to progress
their career.
We completed the mapping of
soy in animal feed to determine
sustainability status.
We improved our chicken welfare
standards, with 65% at stocking
densities less than or equal to
30kg/m
2
and the remainder at
less than or equal to 38kg/m
2
.
All pigs are free from sow-stalls.**
* In line with our business reporting schedule and is included in our 2023 Annual Report, published 10 April 2024
** With the exception of pepperoni (sow-stall free option not currently available)
How did we do?
Achieved
Partially achieved
Still to be achieved
SUSTAINABILITY REPORT CONTINUED
45Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
PLANS FOR 2024
BY THE END OF 2024…
We will have 950 Breakfast Clubs,
feeding 66,000 children every
school day.
We will increase unsold food
redistribution to 45%. We will
maintain cost of manufacturing
waste at 0.20% of sales.
We will have 41 Greggs Outlet shops.
To increase collection opportunities
for unsold food; we will trial two light
van collections and if successful,
we will consider expansion of this
model in 2025.
We will maintain our ranging
principles to ensure 30% of our
range is ‘Healthier Choice’.
At least 60% of the gas we use
across our operations will be
from renewable sources.
At least 25% of our shop estate will
feature Eco-Shop elements. We
will look to design our second
Eco-Shop in 2024.
All of our own brand packaging
will be more easily recycled*.
We will reduce the amount of
packaging used within our
Supply Chain by moving to bulk
supply or reusable containers,
where options are available.
Our core development
programmes, aimed at supporting
our potential future management
colleagues, will be representative
of the ethnic diversity in our
regional talent pools.
100% declared soy will be certified
as sustainable. We will continue
to work with meat, egg and dairy
suppliers to ensure all soy in animal
feed will be from sustainable
sources by the end of 2025.
We will trial the use of wheat from
a regenerative farmed source in
our wholemeal bread production.
We will further improve our chicken
welfare standards, with 75% at less
than or equal to 30kg/m
2
and the
remainder at less than or equal
to 38kg/m
2
stocking densities.
We will publish and implement
our Chicken Welfare Standard.
* Not including hot drinks cups
46
Introduction
The Task Force on Climate-related Financial Disclosures
(‘TCFD’) and other climate-related disclosures made in this
TCFD Report form part of the Company’s Annual Report
and Accounts for the 52 weeks ended 30 December 2023
and are consistent with the TCFD recommendations and
recommended disclosures. The following pages show our
activity to date and our plans and expectations for the future,
as required under Listing Rule 9.8.6 (8)R and as consistent
with ‘The Companies (Strategic Report) (Climate-related
Financial Disclosures) Regulations 2022.
Greggs believes that it is compliant with the Listing Rule,
with the exception that the disclosure of Scope 3 emissions
has been made in respect of 2022 and not 2023 as explained
later in the Metrics and Targets section of this report.
In 2022, we set near-term science-based emissions
reduction targets based on a 1.5°C pathway, which were
approved by the Science Based Targets Initiative (‘SBTi’).
These targets are:
• To reduce absolute Scope 1 and 2 greenhouse gas (‘GHG’)
emissions by 46.2% by 2030 from a 2019 base year; and
• To reduce absolute Scope 3 GHG emissions from
purchased goods and services by 46.2% within the
same timeframe.
During 2023 we repeated the modelling of our Scope 3
emissions, an exercise first carried out in 2021, using more
detailed source data than in the 2021 exercise. The output
from this is now being used to further shape our ongoing
supplier engagement programme which will continue into
2024 and beyond.
As a result of our ongoing supplier engagement programme,
we have begun to collect primary data from a number of
our suppliers. We will complete the verification of this data
before using it in further Scope 3 emissions calculations.
From a governance perspective, we have implemented a
new structure for all sustainability topics and this included
a review of the membership of our internal Net Zero Steering
Group.
We have modelled the physical risks to our internal Supply
Chain sites based on moderate (i.e. 1.5
o
C temperature
increase by 2040) and high (4.4
o
C temperature rise by 2100)
level impacts of climate change. Outputs from this exercise
continue to be reviewed and updated to ensure risks to
operations are mitigated.
We have also assessed the transition risks and opportunities
based on three potential future scenarios:
• A disorderly transition
• Societal shift
• Agricultural impact
The assessed risks and opportunities have been presented
to the Company’s Risk Committee. Further detail has been
included in the Risk Management section of this report,
on pages 59 to 65 .
In 2023 an ESG performance condition was included in the
long-term incentive awards made to Executive Directors
and senior management. It is a carbon metric based on the
absolute reduction in Scope 1 and 2 emissions over the
three-year vesting period of the awards.
It is also proposed that long-term incentive awards made
to Executive Directors and senior management in 2024 will
include an ESG performance condition. This will be a Scope 3
carbon-based metric based on engagement with our supply
chain to drive measurement and reporting of their carbon
footprint.
Greggs understands the importance of climate
change and that we must reduce our own impact
and mitigate against climate risk. We believe
that improved governance and reporting across
all industries and sectors will contribute to the
reduction of carbon emissions and assist in the
transition to a low-carbon future. This TCFD
Report describes our actions over the course of
the year and demonstrates how we continue to
refine our transition activity going forwards.
TASK FORCE ON
CLIMATE-RELATED
FINANCIAL DISCLOSURES
SUSTAINABILITY REPORT CONTINUED
Audit Committee
Greggs plc Board
Operating Board
Risk Committee Sustainability Committee
Net Zero Steering GroupTCFD Steering Group
47Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Greggs has clear ambitions, as detailed in The Greggs
Pledge, to be a net zero business by 2040 across Scopes 1, 2
and 3 and to actively support the British Retail Consortium’s
(‘BRC’s’) Climate Action Roadmap. The individual targets
within this overall ambition and their timeframes are
discussed in further detail in the Metrics and Targets
section below.
Governance
Board oversight of climate-related risks and
opportunities
The Board has overall responsibility for climate-related risks
and opportunities – our approach to climate change is
governed at the highest level within our organisation.
The Board has received specific briefings and updates
on progress during the year on climate change matters,
including the results from our 2022 Scope 3 modelling,
our science-based targets and regular reporting on
our reduction activities related to our Scope 1 and 2
emissions footprint.
We will continue to appraise climate risks and opportunities
with our leadership team including briefing new Directors to
ensure ongoing Board-level climate knowledge and support
for our transition. As our approach to climate risk becomes
more embedded into our regular risk management regime,
the Board will receive regular updates via the Audit
Committee within the scope of our routine risk reporting.
The Board will continue to oversee the development and
delivery of our transition plan in the coming years.
Management’s role in assessing and managing
climate-related risks and opportunities.
Our Chief Executive is ultimately responsible for our
sustainability strategy, which includes climate-related risks
and opportunities. Strategic progress against relevant
targets and commitments is reported to the Board on a
regular basis.
Our Risk Committee (the membership of which includes all
our Operating Board members supported by key functional
heads, including our Heads of Business Assurance and
Sustainability) is responsible for the ongoing assessment
of climate-related risks and mitigating actions. The Risk
Committee meets four times a year and climate change is
a standing agenda item. Outputs from the Risk Committee
are reported into the Company’s Audit Committee.
Climate-related risks have previously been considered within
our existing principal risks rather than as a standalone item.
For example, we considered significant weather events,
such as flooding, within our business interruption risk and
the impact of climate-related weather events or natural
disasters on both availability and product quality when
considering Supply Chain risk.
During 2023, we held sessions with Risk Committee
members and Heads of Function to identify new, emerging
and escalating risks. Following these sessions, in late 2023,
the Risk Committee agreed to add an additional standalone
risk, ‘Failure to effectively respond to climate-related
impacts on our business’, to our Strategic Risk Register.
During 2024, the process of fully documenting the physical
and transitional risks of climate change considered to be of
greatest concern will be completed.
Our Sustainability Committee is responsible for approving
options for the delivery of our climate change strategy. The
membership of this Committee includes all Operating Board
members and is supported by the Head of Sustainability, the
wider sustainability team and relevant subject matter
experts from across the business.
Our climate governance structure
48
Our Net Zero Steering Group (‘NZSG’) is responsible for
identifying and proposing relevant actions to reduce carbon
emissions. Once proposals are agreed by the Sustainability
Committee these are formally included in business plans
as well as in the personal objectives of relevant senior
managers. This ensures a business-wide focus on delivering
the required activity.
In 2022, a TCFD Steering Group was formed to assist in
developing TCFD reporting as well as facilitating analysis
of climate-related risks and opportunities. This group has
continued to work alongside external experts to assess
material physical and transition risks related to our business
model. These results will be used to inform our transition
plan and risk strategy.
Strategy
Climate-related risks and opportunities
and their impact
We continue to develop our detailed understanding of
material climate-related risks and opportunities, which
fall into two categories – physical and transition.
In this context we consider a material climate-related
risk to be one which could have a significant effect on,
or threaten the resilience of our operations, strategy and
financial planning if not managed appropriately, based on
our assessment of the likelihood of occurrence. We plan
to develop a more quantifiable definition through the
course of our work on developing a Transition Plan.
In the Risk Management section on page 60 we note that
we now consider climate change to be a strategic risk to the
business within the time horizon for our current strategic
plan. In this context we consider the following:
• short-term horizon covers the next three years (2024-
2026) in line with our strategic business plan timeline.
• medium-term horizon is the period from 2027-2030 in line
with our near-term Science-Based Targets timeline.
• long-term horizon is from 2031 onwards.
In 2023, the TCFD Steering Group and the NZSG worked with
external advisers to highlight overarching climate-related
risks. A series of workshops and feedback sessions were
held with colleagues across the business to identify which
of these are considered material.
Physical risk assessment
In 2023, we modelled the physical risks to our manufacturing
and distribution sites, our main office locations and a sample
of our shops based on moderate (i.e. 1.5°C temperature
increase by 2040) and high (4.4°C temperature increase by
2100) level impacts of climate change. These scenarios were
chosen in conjunction with our advisers and considering the
views of colleagues across the business as being the most
relevant and plausible to the business.
The output from this modelling suggests that there are
limited physical risks to our operations that would have
a material financial impact on the Group in the short to
medium term, however we will continue to reassess this
to ensure any identified risks to operations are mitigated.
We have considered flood risk in more detail for those sites,
where the risk has been assessed as above the average,
and we continue to review the need for additional flood
mitigations in the future. In addition, climate risk is a key
consideration when we are choosing locations for new
site development.
Transition risks
We have also assessed the transition risks and opportunities
based on three potential future scenarios:
• A disorderly transition i.e. strong global legislative/policy
action to drive change, resulting in widespread carbon
taxation or carbon pricing;
• Societal shift i.e. consumers making a significant move to
low-carbon diets and towards a circular economy,
a regenerative growth model where resources are used in
a way that minimises waste and pollution, keeps products
and materials in use for as long as possible and
regenerates nature;
• Agricultural impact i.e. the effects of climate change
across the globe and the resulting impacts on Supply
Chains as extreme weather occurrences increase in
frequency and temperature rises begin to have a
significant effect.
SUSTAINABILITY REPORT CONTINUED
49Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Climate-related risks, mitigations and opportunities
Our scenario analysis work has identified the following climate-related risks along with an indication of their likely impact, mitigations that are currently in place and any potential associated
opportunities. We consider climate-related risks and opportunities when developing our business strategy.
Risk Impact Mitigation Opportunity
Policy – introduction of
carbon tax increases input
costs (medium to long term)
Higher production costs would need to be offset
or passed on to consumers, potentially impacting
the value proposition of our products with higher
carbon footprints.
We have a varied product range with an increasing
number of plant-based products which offers
choice for consumers looking for lower-priced
or lower-carbon products.
Our plant-based products give us a base to build a
broader lower-carbon product range and participate
in growing demand for such products.
Changing consumer
behaviour (medium term)
Inability to meet significant increased consumer
demand for more sustainable or weather-
appropriate products may lead to loss of sales
and/or missed growth opportunities as customers
switch to products that meet their needs.
We are already developing our range to contain
a higher proportion of plant-based options.
Our reputation for being a responsible business
provides a solid platform from which to
communicate our message.
We constantly review the market for changes in
consumer behaviour and have good insight into
consumer trends.
Our reputation for offering great value and
alternatives to meat puts us in a good place to evolve
our offer in pace with demand.
Energy availability
(medium to long term)
The energy dependency of our shop and Supply
Chain operations may cause issues in the event
of energy rationing/energy availability challenges.
We continue to focus on improving the energy
efficiency of our operations and monitoring
developments in low-emission technologies.
We have a clear ambition and a well-defined pathway
to reduce emissions by switching to renewable
energy sources wherever possible.
Extreme weather
(medium to long term)
We have assessed our own manufacturing and
distribution sites and identified six locations with
a low to medium risk of riverine flooding. We have
also identified three sites where there is a low to
medium risk of exposure to spells of extreme heat.
In addition, we have identified one site with a risk
of longer-term surface flooding.
Our global Supply Chain presents a supply risk
in the event of more frequent extreme weather
events, in terms of product quality, availability
and price volatility.
The geographical span of our Retail estate means
that only a small proportion of our estate should be
at medium/high risk of localised extreme weather
impact at any one time.
We are working closely with our insurers and risk
management team to identify and implement flood
risk mitigation measures in sites where risks have
been identified.
We continue to work with our engineering teams
to ensure that cooling and refrigeration systems
are maintained and remain able to operate in the
event of extreme heat.
n/a
50 Greggs plc Annual Report and Accounts 2023
Resilience
Although our scenario analysis will be repeated in future
years, we are continuing to discuss the issues highlighted
at the highest levels of the organisation. For example,
when examining the results of our physical climate risk
assessment, the outcomes have pointed to climate risks
in certain parts of the world where some of our suppliers
are based, such as Indonesia, Thailand and Brazil. As a
consequence of this, we will continue to engage with
suppliers in these areas to understand their adaptation/
mitigation plans.
The Transition Plan Taskforce (‘TPT’) published guidance
in 2023 on how to develop credible and robust climate
transition plans. We have reviewed the framework (and the
sector specific guidance) and will use this in 2024 to begin
to draft our transition plan. We will also continue to monitor
the development of the International Sustainability
Standards Board proposed disclosure standards and their
potential adoption by UK regulatory bodies.
Risk Management
Identifying and assessing climate-related risks.
We have an established risk process for the whole business,
as described in the risk management section on pages 59 to
65 . The process for identifying, assessing and managing
climate-related risks is part of this process. In 2022, we
engaged external experts to help identify and assess
climate-related risks. As noted above, this process included
direct engagement with our senior leadership team and in
2023 we have integrated climate risks and opportunities into
our ERM process so that all our risks are considered within
a single process.
Managing climate-related risks.
Climate-related risk evaluation forms part of the Risk
Committee’s activity and is now included as a standing
agenda item.
Integration of climate-related risks into
overall risk management.
We treat our climate-related risks in the same way as all
other risks and assess them in line with our ERM framework.
We have continued to assess climate change as an emerging
risk during 2023, and have agreed that it should now be
incorporated within our strategic risk register. The key
climate-related risks and opportunities are now being
captured in our strategic risk register and integrated into the
ERM process for continuous management and risk reduction.
Scope 3 –
Modelling our footprint
In 2023, in partnership with the Carbon Trust we modelled
our Scope 3 emissions for 2022 using the Greenhouse Gas
Protocol (‘GHG)’ Corporate Standard, WRI guidance for the
land sector, as the basis for our calculation.
Using the Scope 3 categories defined by the GHG we
established that 12 of these categories were material
to our business activities.
Following the category assessment, a range of calculation
methodologies was then used to calculate our Scope 3
emissions.
Due to the availability of existing data (i.e. verified emissions
intensities relating to a particular ingredient from a
particular supplier) a combination of methodologies were
applied. This requires an extensive data collection process
and collaboration across a number of our functional teams
(including procurement, logistics and franchise).
• Categories with a generally lower materiality were
approached using spend-based data.
• For higher materiality categories, quantity-based
data was used where available:
– Volumes – purchased products i.e. mass of
ingredients and product-related packaging
– Emissions factors – combination of supplier-specific
factors, Carbon Trust factors, and secondary factors
sourced from reliable databases
• For some non-product related categories,
a combination of methodologies was used
to create sufficiently accurate outputs using
Greggs activity data and Carbon Trust analysis.
All results were subject to review and verification by the
Carbon Trust and the Greggs finance team.
Following our supplier engagement programme in 2022
we have begun to collect carbon intensity data from our
key suppliers. Once this data has been verified, it will be
incorporated into our Scope 3 measurement which will
further refine the accuracy of our model and allow us to
focus efforts on our higher carbon impact value chain.
We know that a number of suppliers have difficulties
providing accurate emissions data at present so we are
continuing to engage and will continue to support on their
own assessment and reduction journey.
We are aware that value chain emissions measurement
is a developing area and processes will be further refined
in the future; we remain confident that opportunities for
data sharing and collaboration will be key to supporting
longer-term emission reduction.
SUSTAINABILITY REPORT CONTINUED
CASE STUDY
CASE STUDY
51Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Metrics and Targets
Metrics used to assess climate-related risks
and opportunities
We have reported on our Scope 1 and 2 greenhouse gas
emissions in our Annual Report each year since 2013 and
have set out our emissions reduction targets. We now report
this data internally on a monthly basis and use it to monitor
performance against our reduction targets. In 2023 our
near-term science-based targets were approved by the
Science Based Targets initiative. Our environmental
management system is certificated to ISO 14001:2015 and
we disclose our emissions through the Carbon Disclosure
Project (‘CDP’).
GHG emissions and the related risks
In 2023, we modelled our Scope 3 emissions for 2022 as
detailed in the case study on page 50 and these were
verified by the Carbon Trust.
We have included these 2022 emissions in this report as our
financial reporting timeframe prevents full assessment and
verification of our 2023 emissions in time for inclusion in this
Report. We will publish our 2023 emissions on our corporate
website in mid-2024.
2022 Scope 3 emissions – 784,774 tCO
2
e.
We report on our Scope 1 and 2 GHG each year. The detailed
disclosures and methodology can be found in the following
section, titled ‘Our carbon footprint’.
Targets used to manage climate-related risks and
opportunities and performance against targets
As part of our strategy to manage climate-related risks,
we have committed to becoming a net zero carbon business
by 2040 in line with the British Retail Consortium’s (‘BRC’)
Climate Roadmap:
Scope 2: Net zero by 2030
Scope 1: Net zero by 2035
Scope 3: Net zero by 2040
As noted above we have also set science-based targets to
give us a clearly-defined pathway to emissions reduction
that is aligned to climate science. The commitment to the
BRC’s roadmap is a more ambitious target – we always strive
to achieve the more stretching target.
In 2022, we set near-term science-based emissions
reduction targets based on a 1.5
o
C pathway which were
approved by the Science Based Targets Initiative (‘SBTi’).
These targets are:
• To reduce absolute Scope 1 and 2 GHG emissions 46.2%
by 2030 from a 2019 base year; and
Plant-Based Products
Consumers are becoming increasingly climate
conscious and are recognising that they can
positively contribute to the planet by reducing meat
within their diets. At Greggs, we want to ensure that
our customers can choose non-meat alternatives
that are right for them, are available in all dayparts
and that align with our dedication to doing good.
During 2023, we continued to offer our customers
more choice, alongside our traditional favourites,
with our vegetarian and vegan ranges, including the
fantastic Vegetable Curry Bake, Vegetable Bhaji
Flatbread, Mexican Chicken Free Bake, and the
classic Vegan Sausage Roll. We are delighted that
our efforts were recognised at The Sammies 2023,
where we not only won chain retailer of the year,
but also the healthy eating award for our new
Sweet Potato Bhaji and Rice Salad Bowl.
• To reduce absolute Scope 3 GHG emissions from
purchased goods and services 46.2% within the same
timeframe.
Performance against these science-based targets is our
primary metric at present. The data is presented in the
Streamlined Energy and Carbon Reporting section below.
Progress from the 2019 science-based target baseline for
Scopes 1 and 2 is shown in the graph below:
Market-based Scopes 1 and 2 absolute emissions
2019 2020
2021 2022 2023
Total 1 and 2 Market based tCO
2
e
SBT = Scopes 1 and 2 Market based tCO
2
e
Intensity Market based tCO
2
e per £m turnover
Absolute emissions tCO
2
e
Intensity tCO
2
e per £m turnover
0
10,000
20,000
30,000
40,000
50,000
40
35
30
25
15
20
10
5
0
As noted above we do not yet have a Scope 3 emissions
figure for 2023. The outcome of the 2022 modelling
exercise described above shows that Scope 3 emissions
have increased to 784,774 tCO
2
e from a 2019 baseline of
491,962 tCO
2
e, largely as a result of the growth of the
business since 2019.
The exercise to calculate a Scope 3 emissions figure for 2022
built on the original modelling of 2019 Scope 3 emissions and
has been carried out using more detailed assumptions and
emissions factors as described in the case study on page 50 .
CASE STUDY
52
Our Approach to
Renewables and
Alternatives to Fossil Fuels
We have made great progress in 2023 and now all the
electricity we procure comes from certified renewable
sources. This equates to 98% of all electricity used.
Going forward, we will continue to work with landlords
in our serviced locations to see how we can move the
remainder of our usage to renewables.
From a Scope 1 perspective, we have moved 30% of
our natural gas usage to renewable gas sourced from
anaerobic digestion. We plan to double our usage of
renewable gas in 2024, which will leave us on 60%
renewable gas by the end of 2024. Diesel accounts for
a significant part of our remaining Scope 1 emissions,
and we have a plan to trial hydrogenated vegetable oil
in our logistics fleet as a medium-term alternative to
diesel until there is a clear UK plan to develop the
infrastructure across the UK, for either electric
vehicles or hydrogen. We continue to investigate the
use of hydrogen as a future, longer-term replacement
for both diesel and natural gas.
SUSTAINABILITY REPORT CONTINUED
The 2019 emissions have also been recalculated using this
more-refined methodology where possible which has resulted
in a higher figure for 2019 emissions of 522,453 tonnes CO
2
e.
Long-term incentive awards made in 2023 to Executive
Directors and senior management include an ESG performance
condition with a weighting of 10% of the award. It is a carbon
metric based on the absolute reduction in Scope 1 and 2
emissions over the three-year vesting period of the awards.
In 2024, we will continue to consider and develop quantitative
metrics and targets for material climate-related risks and
opportunities and incorporate these into our business plan.
This will include a Scope 3 based performance condition for
the long-term incentive awards made to Executive Directors
and senior management in 2024.
We continue to report Scope 1 and 2 footprints in our monthly
reporting pack. This ensures our leadership has ongoing
visibility of the delivery of our reduction strategy.
During 2023, through our Net Zero Steering Group, we have
developed a more detailed operational plan to reduce our
Scope 1 and 2 emissions (in line with our reduction trajectory).
Our remodelled Scope 3 emissions have been used to further
develop our supplier engagement programme which will be
delivered in 2024.
Next steps for Greggs
In 2024, we will continue to deliver reductions in line with our
SBTs for our Scope 1 and 2 emissions while also delivering
our supplier engagement programme to support our Scope 3
emissions reduction plan. As this is primarily focused on our
high impact ingredients, we will also use this as an opportunity
to further consider the physical risks across our value chain.
We will review our scenario analysis process to ensure
we identify any additional physical or transition risks
or opportunities.
Our carbon footprint
We disclose our greenhouse gas (‘GHG’) emissions through
the Carbon Disclosure Project (‘CDP’). We continue to drive
efficiencies to further reduce our carbon footprint as we
work towards our net zero ambition. In 2023, we reduced
our gross location-based intensity (tonnes per £ million
turnover) impact by 9.13% (compared to 2022 or 33.84%
compared to 2019).
Our market-based carbon footprint for the 2023 financial
year was 42,810 tonnes of carbon dioxide and equivalent
gases (CO
2
e), with an intensity 23.66 tonnes of CO
2
e per
£million turnover, which reflects our efforts in generating
and purchasing low-carbon energy.
Global GHG emissions data
In line with the Companies Act 2006 (Strategic Report and
Directors’ Report) Regulations 2013, we are reporting our
GHG emissions as part of our annual Strategic Report. Our
GHG reporting year is the same as our financial year, from
1 January 2023 to 30 December 2023. We have reported on
all of the emission sources which we deem ourselves to be
responsible for, as required under those Regulations. These
sources fall within our operational control and financial
boundaries and include emissions from manufacturing, retail
and distribution sites and the operation of our distribution
fleet, all of which are wholly based in the UK. We do not have
responsibility for any emission sources that are outside of
our operational control. The methodology used to calculate
our emissions is based on the GHG Protocol Corporate
Accounting and Reporting Standard, Defra Environmental
Reporting Guidelines and ISO 14064-3: 2019 Greenhouse
gases Part 3 – Specification with guidance for the
verification and validation of GHG statements.
Dual emissions reporting
Overall emissions have been presented to reflect location
and market-based methodologies, affecting both Scope 1
and Scope 2 emissions.
Streamlined Energy and Carbon Reporting
In line with Streamlined Energy and Carbon Reporting
(‘SECR’) requirements, we have also reported on the
underlying energy used to calculate our GHG emissions.
Where original data was provided in litres of diesel, gas oil or
petrol it has been converted to kWh. The reporting boundary
has been determined by operational control, whereby all
emissions have been included within scope, i.e. Scope 1
and Scope 2.
CASE STUDY
53Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Energy Efficiency Initiatives
Greggs is committed to reducing the energy consumption and
the carbon impact from its operations. We have set our target
of net zero carbon emissions across the organisation by 2040
and have put in place a plan aligned to the BRC’s Climate
Roadmap. We have moved to renewable electricity sources
across approximately 98% of our estate. In 2023 we replaced
30% of our natural gas usage with biogas which is covered
by Renewable Gas Guarantee of Origin (‘RGGO’) certificates.
As the GHG Protocol does not recognise any differentiation
between natural gas and biogas, the data reported in the
table below makes no allowance for this. Using the UK
Environmental Reporting Guidelines rather than the GHG
Protocol would result in a reduction in Scope 1 emissions
of 2,468 tonnes of CO
2
e, using market-based emissions
Location and market-based emissions
Current reporting
year 2023
(tonnes of CO
2
e)
Comparison
year 2022
(tonnes of CO
2
e)
Base
year (2019)
(tonnes of CO
2
e)
Scope 1 Combustion of fuel and operation of facilities 34,325 32,813 33,155
Scope 1 Refrigerants 5,505 6,999 5,513
Scope 2 (location-based) Electricity purchased for own use (including PV generated and green tariff) 55,318 47,716 57,294
Scope 2 (market-based) Residual electricity 2,981 7,109 2,909
Gross emissions (location-based) Total Scope 1 and 2 CO
2
e emissions 95,148 87,529 95,962
Gross emissions (market-based) Total Scope 1 and 2 CO
2
e emissions to account for use of renewable energy 42,810 46,922 41,577
Intensity measure (location-based) Tonnes of CO
2
per £ million turnover 52.58 57.86 82.54
% change 2023 compared with 2022 -9.13% -36.29%
Intensity measure (market-based) Tonnes of CO
2
e per £ million turnover 23.66 31.02 35.76
Intensity % change accounting for renewable energy 2023 compared with 2022 -23.73% -33.84%
Location-based method is provided for disclosure only
UK underlying energy use (kWh)
Total Scope 1 energy use Combustion of fuel and operation of facilities (natural gas, fleet fuel oils, company cars & LPG) 149,351,211 140,090,349 141,717,583
Total Scope 2 energy use Electricity 267,160,278 246,749,496 224,154,292
Total energy use (kWh) 416,511,489 386,839,845 365,871,875
We have been awarded the Carbon Trust Route to Net Zero Standard in recognition of our work on carbon efficiency and reduction and our environmental management system is certificated to
ISO 14001:2015. In addition, we disclose our GHG emissions through the Carbon Disclosure Project.
2023 REDUCTION IN GROSS LOCATION-BASED INTENSITY IMPACT
(TONNES CO
2
PER £M TURNOVER)
9.13%
calculations. We continue to investigate other renewable
energy sources for our remaining Scope 1 emissions.
In 2023, we measured our 2022 value chain emissions with
the Carbon Trust and found that Scope 3 emissions account
for 94.4% of all market-based emissions, with emissions
from Scope 3 purchased goods and services (products)
having the biggest impact. We have set near-term
Company-wide emission reduction targets in line with
climate science which have been approved by the SBTi.
We continue to focus our internal teams on energy efficiency
and carbon reduction programmes. Since the opening of our
first Eco-Shop in 2022, 21% of our overall estate now has
Eco-Shop initiatives in place. We continue to replace high
Global Warming Potential (‘GWP’) refrigerants in refrigeration
and air conditioning systems with lower GWP refrigerants,
and all new refrigeration equipment uses low GWP
refrigeration gas as a specification requirement. We have
successfully trialled electric refrigeration units on our
delivery fleet, replacing diesel-powered refrigeration and
this will be in place across 28% of the fleet by March 2024.
54
FINANCIAL REVIEW
STRONG FINANCIAL
PERFORMANCE
SUPPORTING
INVESTMENT
FOR GROWTH
Greggs delivered a strong financial
performance in 2023 against an economic
backdrop that continued to be challenging.
Sales growth reflected our strategic
ambitions and progress, and we opened a
record number of new shops. Cash generation
was good and our robust balance sheet will
support our growth strategy as we invest in
capacity to enable further growth and strong
capital returns.
Richard Hutton
Chief Financial Officer
2023
£m
2022
£m Variance
Revenue 1,809.6 1,512.8 +19.6%
Underlying operating profit 171.7 154.4 +11.2%
Net finance expense
(inc.leases) (4.0) (6.1) -34.4%
Underlying profit before tax 167.7 148.3 +13.1%
Exceptional income 20.6 – –
Profit before tax 188.3 148.3 +27.0%
Income tax (45.8) (28.0) +63.6%
Profit after tax 142.5 120.3 +18.5%
Underlying diluted earnings
per share 123.8p 117.5p +5.4%
Underlying return on
capital employed 21.1% 21.0%
Sales
Total Group sales for the 52 weeks ended 30 December
2023 grew by 19.6% to £1,810 million (2022: £1,513 million).
Growth was delivered through both new shop openings
and like-for-like sales growth in existing stores, driven
by a combination of volume growth and price increases.
Total Group revenue reflects sales from company-managed
shops, which include delivery sales, and sales through
business-to-business channels with our franchise and
wholesale partners.
Reporting ‘like-for-like’ sales (sales in company-managed
shops with more than one calendar year’s trading history) is a
key alternative performance measure for Greggs, as it shows
underlying estate sales performance excluding the impact
of new shop openings and closures. Our like-for-like sales
volume growth remained strong through the year whilst the
element relating to pricing reduced as we annualised against
price increases made in May and October 2022. The Q3 2023
result was flattered by c.1% due to the comparison with Q3
2022 when we closed the estate for a day for the funeral of
Queen Elizabeth II. Overall growth was in line with our plans
for the year, with like-for-like sales 13.7% higher year-on-year.
55Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Q1 Q2 Q3 Q4 2023
Company-
managed
like-for-like
sales vs. 2022
17.0% 15.1% 14.2% 9.4% 13.7%
Profit for the year
Underlying profit before tax (excluding exceptional income)
in 2023 was £167.7 million (2022: £148.3 million). Our strong
trading performance reflected the Greggs brand’s value
proposition and continued momentum from our strategic
growth initiatives. Profit before tax of £188.3 million includes
a net exceptional gain of £20.6 million which primarily relates
to the settlement of business interruption insurance claims
made in 2020.
The overall level of cost inflation in 2023 averaged 8.5% for
the year but with an exit rate closer to 5%. Our wage award
was fixed for the year from January, and food and packaging
inflation reduced through the second half of the year once
we had annualised on the significant increases seen in 2022.
Energy costs were less volatile than in recent times and our
shop occupancy cost ratio (shop costs such as rent, rates
and service charges as a percentage of sales) continued
to improve.
Looking forward we currently expect overall input cost
inflation in 2024 to be in the range of 4-5%, although an
element of this remains subject to geopolitical risks.
We have improved levels of forward cover, with circa 80%
of our energy requirements fixed for the year and forward
purchase agreements representing four months of our food
and packaging needs. Looking further ahead we have fixed
the price of 50% of our energy requirements for 2025.
Strategic progress, margin and return on capital
In October 2021 we set out our ambitious plans to double
sales over a five-year period as we emerged from the
pandemic with a strong brand and clear growth
opportunities. Two years on from this we are very much on
track with sales of £1.8 billion in 2023, up circa 50% in two
years. A couple of things have changed – back in 2021 no one
foresaw the dramatic rise in cost (and consequently price)
inflation that was to come. Also, with the benefit of hindsight,
it is clear that some of our early success in the food delivery
market was a reflection of temporary pandemic conditions.
However, despite these factors looking across the last two
years we are pleased with the progress that has been made
in developing the growth pillars that we identified:
• Our core daytime walk-in business has recovered well
after the pandemic and data shows that we have taken
market share, supported by an investment in marketing
to drive consideration and purchase intent.
• Estate growth has been a particular success story, with
a net 292 new shops opened (164 company-managed and
128 franchised) over 2022 and 2023. In addition we have
relocated 67 existing shops, in general moving them to
bigger, better units that have the space to realise the
growth potential in their catchments.
• Evening customer growth is developing well. This will be
one of the longer-term drivers of growth and requires us
to invest in staffing initially as we develop awareness of
Greggs as an early evening option.
• As noted above, our delivery success in 2021 was partly
attributable to pandemic conditions and has since
rebased. Rolling out with a second delivery partner has
resulted in a modest increase in commission costs but
willfurther leverage our shop network, supporting
strongreturns on the capital invested there. Sales
increased 23.6% in 2023, supported by the roll out with
the secondpartner.
• Marketing is becoming more personalised as we
incentivise customers to engage with our loyalty scheme
and learn more about how they shop with Greggs.
Our primary financial objective remains to maintain the
strong returns on capital employed (‘ROCE’) in the business,
as evidenced by our performance over many years:
2019 2020 2021* 2022 2023
ROCE** 20.0% pandemic 23.0% 21.0% 21.1%
* 2021 result reflects pandemic support measures
** Underlying ROCE, excluding exceptional items
Business growth has been delivered whilst maintaining
strong capital returns, despite the cost investments that
we have made to develop new channels. Delivering a healthy
ROCE is embedded as a key element of our performance
management and we aim to deliver a ROCE which averages
circa 20% over time. In recent years we have exceeded this
as capacity utilisation in our Supply Chain has been at a
historically high level. As previously stated, we have
significant new facilities coming online in the near to medium
term to support growth; while the business ‘grows into’ this
new capacity we would naturally expect modest dilution of
Group returns, which we expect will be seen in 2025/26.
As the benefits of capacity utilisation return, we would
expect this dilution to reverse.
Business growth has been
delivered whilst maintaining
strong capital returns,
despite the cost investments
that we have made to develop
new channels.
56
FINANCIAL REVIEW CONTINUED
The development of new channels and dayparts is driving
incremental sales volumes and, as noted above, strong
returns on capital. In support of this, in 2023 we increased
our investment in marketing and in shop labour, as well as
agreeing additional delivery aggregator costs as we moved
to a non-exclusive partner arrangement. These initiatives,
along with growth in participation in the Greggs App loyalty
programme, are successfully increasing the frequency
of customer visits and increasing Greggs’ share of the
food-to-go market. The overall margin mix impact of this
incremental business resulted in a modest dilution in
underlying net profit margin to 9.3% in 2023 (2022: 9.8%).
Financing charges
The net financing expense of £4.0 million in the year
(2022: £6.1 million) comprised £9.6 million in respect of the
IFRS 16 interest charge on lease liabilities and £0.7 million
of facility charges under the Company’s (undrawn) financing
facilities, offset by net income of £6.3 million relating to
income on cash deposits, interest on the defined benefit
pension liability and foreign exchange losses.
Taxation
The Company has a simple corporate structure, carries out
its business entirely in the UK and all taxes are paid here.
We aim to act with integrity and transparency in respect
of our taxation obligations.
The Group’s overall effective tax rate on profit, including the
impact of exceptional items, in 2023 was 24.3% (2022: 18.9%)
which reflects the increase from 19% to 25% in the
corporation tax rate from 1 April 2023 and the discontinuance
of ‘super-deduction’ enhanced capital allowances from the
same date. The underlying tax rate for the year was 24.4%
(2022: 18.9%).
We expect the effective tax rate for 2024 to be around 26.0%
and going forward the effective rate is expected to remain
around 1.0 percentage point above the headline corporation
tax rate; this is principally because of expenditure for which
no tax relief is available, such as depreciation on properties
acquired before the introduction of structures and buildings
tax allowances, and acquisition costs relating to new shops.
Earnings per share and dividend
Underlying diluted earnings per share in 2023 were
123.8pence (2022: 117.5 pence per share). Including the
net exceptional income, diluted earnings per share were
139.2pence (2022: 117.5 pence per share).
The Board recommends a final ordinary dividend of
46.0pence per share (2022: 44.0 pence per share). Together
with the interim dividend of 16.0 pence (2022: 15.0 pence)
paid in October 2023, this makes a total ordinary dividend
for the year of 62.0 pence (2022: 59.0 pence). This is covered
two times by underlying diluted earnings per share and is in
line with our progressive ordinary dividend policy, which
aims to increase the dividend in line with growth in earnings
pershare.
In application of the capital allocation policy outlined
below under “Cash flow and capital structure” the Board
has determined that the current level of cash held by the
Company exceeds its minimum requirements, having
taken into account investment plans and the distribution
of ordinary dividends. As a result the Board has approved
a special dividend of 40.0 pence per share.
Subject to the approval of shareholders at the annual
general meeting, the final ordinary and special dividends
will be paid on 24 May 2024 to shareholders on the register
at 26 April 2024.
Balance sheet
Capital expenditure
We invested a total of £199.8 million (2022: £110.8 million) in
capital expenditure during 2023. Retail estate expenditure
grew as we increased the number of new company-managed
shop openings and relocations, and completed more shop
refurbishments. In our Supply Chain we installed a fourth
production line for our iconic savoury rolls and bakes at
Balliol Park in Newcastle and have also started work to
extend logistics capacity at our Birmingham and Amesbury
distribution centres.
Depreciation and amortisation on property, plant and
equipment and intangibles in the year was £70.5 million
(2022: £62.7 million). A further £54.5 million (2022 £52.8
million) of depreciation was charged in respect of
right-of-use assets on capitalised leases.
As previously communicated, our investment in capital
expenditure will continue at an elevated level until 2026
as we provide increased capacity in our Supply Chain to
support our ambitious growth plans, whilst also growing
and refurbishing our Retail estate. In 2024 we will continue
the work to expand Radial Distribution Capacity at our
Birmingham and Amesbury sites. We also expect to start
57Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
work on the construction of two new sites in the Midlands;
one in Derby and one in the Kettering/Corby area, which will
provide new manufacturing and logistics capacity to support
our ambitious growth plans. We expect the new sites to be
operational in 2026/27.
Our shop opening and relocation plans mean that we will
invest in circa 170 new company-managed shops in 2024 and
refurbish around 150 existing company-managed stores as
we modernise older sites and introduce additional facilities
to support our growth plans. Our forward view on Retail
capital expenditure reflects the changing mix of shop
openings in the pipeline as we service additional channels
and support growth opportunities, for example the roll-out
of equipment to support made-to-order iced drinks. In our
Working capital
We ended the year with Group net current assets of
£25.4 million (2022 £38.9 million) as we continue to carry a
robust cash and cash equivalents position of £195.3 million
(2022: £191.6 million) to support investment in our capital
expenditure programme. Excluding cash and cash
equivalents, net current liabilities increased from £152.7
million to £169.9 million over the year. This reflects the
impact of strong growth on trade and other payables.
Pension scheme
The Company’s closed defined benefit pension scheme
continues to be in a net asset position; £6.6 million at the
endof 2023 (2022: £6.3 million). The stable balance sheet
position reflects small movements in the discount rate
andinflation assumptions which increased liabilities by
£2million, offset by an equivalent reduction in liabilities
as aresult of changes in the mortality assumptions.
The scheme underwent a full actuarial revaluation in 2020,
the results of which showed a deficit in funding. The
Company committed to making additional contributions of
£2.5 million each year from 2021 to 2026 to ensure that any
funding requirements are met over the medium term as the
scheme works towards full de-risking. £5.5 million of these
committed contributions were accelerated in 2022 due to
volatile market conditions, leaving £4.5 million of the original
commitment to pay in future years.
Cash flow and capital structure
The net cash inflow from operating activities after lease
payments in the year was £257.1 million (2022: £198.8 million).
The strength of cash generation reflected the growth in
profits, settlement of two insurance claims related to
business interruption in 2020 and a rephasing of tax
payments to reflect full expensing capital allowances. At the
end of the year the Group had net cash and cash equivalents
of £195.3 million (2022: £191.6 million).
Retail estate we target a 25% cash return on investment
on new shops and typically exceed this level. The success of
the business means we are opening shops that trade longer
hours and have higher than average sales and returns.
Overall we expect capital expenditure in 2024 to be in the
range of £250 to £280 million, dependent on timing of the
planned acquisition of the additional site in the Kettering/
Corby area. We anticipate that capital expenditure will be
around £200 million in each of 2025 and 2026 as we invest
to support our growth plans. Beyond this investment phase
we expect maintenance capital expenditure to be up to 5%
of revenue, with additional expenditure to support further
growth.
58
FINANCIAL REVIEW CONTINUED
The Company’s undrawn revolving credit facility, which runs
to December 2025, allows it to draw up to £100 million in
committed funds, subject to it retaining a minimum liquidity
of £30 million (i.e. maximum net borrowings are £70 million).
Taking this into account, total available liquidity at the end of
2023 was £265.3 million (2022: £261.6 million). We intend to
refinance the revolving credit facility in the year ahead.
Our approach to capital allocation can be described as a
series of priorities:
1. Invest to adequately maintain the business in order
to support its continued success. As noted above, in
normal circumstances we expect maintenance capital
expenditure to be circa 5% of revenue.
2. Maintain a strong balance sheet. Reflecting the inherent
gearing in the Group’s leaseholds and working capital we
aim, in normal circumstances, to maintain a year-end net
cash position of £50 to £60 million to allow for seasonality
in the working capital cycle and to protect the interests of
all creditors. This will be periodically reassessed as the
Group grows.
3. Deliver an attractive ordinary dividend to shareholders.
We continue to target a progressive ordinary dividend,
normally around two times covered by underlying profit
after taxation.
4. Selectively invest to grow. As outlined above we intend
to continue to make capital investments in excess of the
maintenance level in the coming years to support our
growth plans.
5. Return surplus cash to shareholders. Where net cash
on the balance sheet exceeds our minimum requirement,
taking into account that reserved for growth investments,
we expect to return cash to shareholders by way of
special dividends.
The Company’s current cash position will normalise in future
years following our investment to support our ambitious
growth plan and payment of the special dividend described
above.
Looking forward
We are leveraging our strong financial position to support
our ambitious growth plans. At the same time we will
maintain the discipline that has delivered profitable growth
and excellent capital returns, to the benefit of all of our
stakeholders. We remain confident in the future.
Richard Hutton
Chief Financial Officer
5 March 2024
59Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
RISK MANAGEMENT
OUR APPROACH
TO RISK MANAGEMENT
The various roles within the risk management process are set out below:
WHO? ROLE KEY ACTIVITIES/RESPONSIBILITIES
The Board Direction and oversight
Approving policy; overall responsibility for risk; setting risk appetite;
embedding the risk management culture; setting the ‘tone at the top’
Audit Committee The Board activities
as delegated
Challenge and agreement of principal risks disclosure; oversees risk
management systems and controls; annual review of effectiveness
of approach
Operating Board Ownership and
monitoring
Ownership and management of significant risks; agreeing and
monitoring actions to mitigate risks
Risk Committee Identifying,
assessing and
monitoring risk
Consideration of new and emerging risks; escalation of functional
risks; strategic risk review and validation
Business
Assurance team
Independent
overview
Managing the risk register; consolidation of significant risks;
independent assurance over controls; monitoring compliance with
policy; updating Audit Committee at each meeting
Heads of business
functions
Operational risk
ownership and
implementing
actions
Identifying risks which may prevent the achievement of objectives;
ongoing review of risks and controls within area of remit;
supporting strategic risk owners throughout the risk management
process; implementing controls to mitigate risk
Process owners Day-to-day business
operations
Ensuring that mitigating controls are operating effectively; reporting
areas of new and emerging risk; ensuring compliance with policies
and procedures
Top downBottom up
An effective and robust risk management process
is fundamental to protecting our business, our
customers and colleagues, and shareholder value.
Risk management and internal control
To be able to deliver our strategy and make the right
decisions for the business, we need to understand and
manage our risks. Taking risks in a controlled way can help
us to deliver value whilst protecting the business, our people
and our reputation. Risks cannot be avoided, but an effective
system of risk management ensures that they are mitigated
to an acceptable level.
Roles and responsibilities
The Board has overall responsibility for risk management,
and determines the nature and extent of risks we are
prepared to take in the pursuit of our strategy.
The Audit Committee, on behalf of the Board, maintains
oversight of the risk management approach, including
reviewing its overall effectiveness on an annual basis,
and receiving regular updates on assurance activity.
Risk is overseen by a Risk Committee, which is a committee
of our Operating Board and has responsibility for proactively
managing risk. Other senior leaders are also part of the
Committee and attend meetings, which have taken place
four times this year.
60
Risk management process
We have a risk management policy and framework in place,
both of which have been approved by the Board. This
provides us with a robust structure and drives a consistent
approach.
Our risk process works ‘top down’ and ‘bottom up’, as
shown in the diagram on page 59 . Risks are identified
by considering potential events which could prevent the
achievement of our objectives.
The Operating Board is responsible for maintaining the
overall corporate risk map, which documents the key risks
to the achievement of strategic objectives. We conduct a
formal review of our key strategic risks twice a year via the
Risk Committee, with input from each of the risk owners who
have an opportunity to highlight any changes. This allows
us to discuss the risk gradings, and ensure that the level
of risk remains consistent with our risk appetite. The Risk
Committee also considers new risks escalated to it at every
meeting, and assesses whether or not these are significant
enough to merit inclusion on the strategic risk register.
The risk process is facilitated by members of the Business
Assurance team, who help identify and assess key risks,
as well as providing support in developing an appropriate
risk response. The team also provides a route for matters
of concern to be quickly escalated to the Operating Board
and the Risk Committee. In addition, Business Assurance
provides an independent view on the controls in place over
specific risk areas within the internal audit plan.
Risks are assessed under our strategic pillars (including The
Greggs Pledge), and are categorised into four broad groups
– strategic, operational, financial and legal/regulatory.
Our strategic risk register captures a description of each
risk, and allocates an Operating Board member as risk owner.
Each risk owner is responsible for ensuring that appropriate
mitigating controls are in place. We then set out key controls
for each risk, and make an assessment of their
effectiveness. The likelihood and impact of each risk arising
is then calculated, both before and after the introduction of
mitigating controls.
Developments in 2023
During 2023, we further embedded our Enterprise Risk
Management approach, principally through more regular
and structured engagement with our Heads of Business
Functions. They have had input into the identification of
new and emerging risks, as well as opportunities to raise any
specific areas of concern. Risk workshops have been held for
our strategic risks, involving the risk owner and all relevant
subject matter experts, to ensure that the content of the
register remains accurate and up to date.
We have worked with our insurance brokers in conducting
an overall review of our approach to insurance, a significant
mitigating control against a number of our strategic risks.
This has given us assurance that our insurance model is fit
for purpose and offers value for money.
Our brokers also supported us with facilitating a Board risk
workshop during the year. This provided detail on our risk
management approach and framework, linking to the UK
Corporate Governance Code. Board members then reviewed
our existing strategic risks, discussed risk appetite and
considered any new and emerging risks.
We recruited additional resource within the Business
Assurance team to ensure that we are able to continue
to support risk management development across the
growing business.
Work has been undertaken to further develop our strategic
risk register, to better align it with the needs of the business.
Although now more user friendly, there is still opportunity
for improvement, and we continue to build on our existing
model.
Plans for 2024
Sessions with Heads of Business Functions will continue,
and we will also increase our engagement with the functional
management teams, which will help to widen our knowledge
base.
We will review our approach to risk appetite, and apply an
assessment to each category of risk, rather than considering
it on a risk-by-risk basis.
With regard to specific areas of risk, our Greggs Pledge
commitments will be scrutinised and a risk register entry
completed for each. We will also document our fraud risk
and ensure that this is properly managed.
Climate risks
As set out in our TCFD disclosure on pages 46 to 53 ,
we are continuing to develop our understanding of material
climate-related risks and opportunities. Physical and
transition risks have been identified and are being monitored
as a standing item on our Risk Committee agenda. A ‘Failure
to effectively respond to climate-related impacts on our
business’ has been included within our strategic risk register,
allowing us to document and monitor the associated controls
as part of our routine risk approach. We remain of the view
that climate risk does not constitute a principal risk to the
business within the time horizon of our current strategic
plan. However, we keep under review changes, particularly
in legislation and customer preferences, to identify any
increase in the level of risk.
RISK MANAGEMENT CONTINUED
61Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Emerging risks
We conduct an emerging risk review on a quarterly basis,
and report our findings to the Risk Committee and the Board.
Various sources of information are used to ensure this is as
complete as possible:
• Horizon scanning by subject matter experts throughout
the business, with issues identified being escalated to
our Operating Board via a monthly risk dashboard;
• Engaging with our functional heads to discuss any areas
of concern within their remit;
• Monitoring customer and consumer trends;
• Taking input from our advisors and other specialists
with whom we work.
Current areas of emerging and escalating risks which we
are monitoring include supplier or partner actions damaging
our reputation, reliance on third parties for business-critical
systems and economic pressures.
Risk appetite
Risk appetite is the level of risk which we are prepared to
take to meet our strategic objectives. In determining this,
we recognise that there is a balance between a prudent
approach to risk and sufficient flexibility to take appropriate
opportunities when they arise.
Our appetite for taking risks depends on the category of
risk in question. For example, we would be prepared to take
more risk in the pursuit of our strategy than in areas such
as food safety, where compliance with legislation drives
a zero-tolerance of risk. We assess our appetite on an
individual risk basis, and then determine whether the
current level of risk is within our acceptable tolerance,
before identifying further mitigating action if necessary.
Changes to principal risk disclosures
A principal risk is a risk or combination of risks that can
seriously affect our performance, future prospects or
reputation. Not all of our strategic risks are considered to
be principal risks, only those which would have a significant
impact on our ongoing viability within the timeframe of our
strategic plan.
There have been no significant changes to our principal risks
during 2023. Changes made within our strategic risk register
had the aim of improving visibility of controls, and clarifying
risk ownership, through sub-dividing existing risks into two
or three. However, this does not impact on the principal risk
which remains consistent.
The following table sets out the principal risks, shows the
movement during the year, and describes the impact and
key mitigations. The list is not in priority order, and does not
include all the risks which are faced by the business. Other
risks which are not included here could also have a negative
impact on the business, including any which are not
presently known to us. The position described on pages 62
to 64 is a summary at the time of publishing this Report.
62
Risk and description Impact Key mitigations Strategic pillars Movement
BUSINESS
INTERRUPTION EVENT
We could suffer a significant business
interruption event impacting one or
more of our key locations. For example
a prolonged power outage, denial of
access or an incident resulting in
physical damage.
OPERATIONAL
We would potentially be unable to
supply our customers for a period
of time. This could impact our own
customers, those of our franchise
partners, and also our wholesale
sales through Iceland.
– We have contingency plans in place for our sites, which are
tested periodically. This includes prioritising our key lines in
the event of any issues.
– Our diversified product range from multiple production sites
provides alternatives for our customers.
– We have flexibility within our network, to enable us to continue
our operations.
– Insurance cover is in place, and we liaise closely with insurers,
particularly when designing new sites or improving existing
premises.
1
2
3
4
5
SUPPLY CHAIN
DISRUPTION
External supply could be interrupted,
resulting from issues such as third-party
business interruption, or unexpected
product shortage.
OPERATIONAL
A prolonged outage at one of our
key suppliers could impact on our
ability to produce some of our
range, or otherwise affect our
ability to operate.
– We aim to avoid single-source supply for key ingredients.
– In the event of interruptions, we are agile in our response to
implementing contingency plans.
These are regularly tested.
– Relationships with suppliers are managed centrally
by our Procurement teams, including a risk assessment
process.
1
2
3
4
5
CYBER AND DATA
SECURITY INCIDENT
A cyber incident may occur, which
impacts on our IT infrastructure.
The external threat environment
is constantly evolving.
OPERATIONAL
We could suffer a significant loss of
data, resulting in litigation and fines.
Our operations could be disrupted
for a period of time.
– Third parties provide expertise and support, including regular
penetration testing and a Security Operations Centre
monitoring our networks around the clock.
– Our technical measures are constantly reviewed and updated
in line with changing requirements and recognised information
security control sets. An independent assurance programme
is in place to review this.
– Ongoing training and advice are provided to our colleagues
to improve awareness and strengthen our detection and
prevention capabilities.
2
3
4
PRINCIPAL RISKS AND UNCERTAINTIES
RISK MANAGEMENT CONTINUED
STRATEGIC PILLARS
1
Great tasting, freshly prepared food
2
Best customer experience
3
Competitive Supply Chain
4
First class support teams
5
The Greggs Pledge
63Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
Risk and description Impact Key mitigations Strategic pillars Movement
PROLONGED SYSTEM
DOWNTIME/INTERRUPTION
As we streamline the business and
embrace greater flexibility in our working
arrangements, we increase our reliance
on technology. Any system interruption
becomes more disruptive, with an
increased risk of it having an impact
on business operations.
OPERATIONAL
We may be unable to run our
production systems for a period of
time. This could ultimately impact
on our ability to supply our shops.
Data may be unavailable or lost,
making it difficult for us to operate.
– We continue to invest in our IT infrastructure, including
utilising cloud-based solutions and increasing resilience
within our network.
– We have established disaster recovery processes which are
tested periodically.
– Our Enterprise Resource Planning system incorporates multiple
layers of resilience.
– External partners are engaged to provide specialist support
and expertise when required.
2
3
4
DETERIORATION OF
RELATIONSHIP WITH
KEY PARTNER
We continue to work closely with
franchise, wholesale and delivery
partners in order to broaden our service
offer into locations where our customers
want us to be. There is a risk that our
strategy and goals are not fully aligned.
STRATEGIC
A lack of alignment could result
in targets not being met, due to
performance not being optimised.
The brand’s reputation could be
damaged, and the relationship
would be put at risk.
– We work with a number of respected partners, and are
continuing to broaden the range of businesses with whom we
operate. This reduces the reliance on any one individual partner.
– Contracts and service-level agreements are in place, along
with a robust onboarding process for new partners. Ongoing
performance is measured.
– Regular dialogue ensures an alignment of goals, and early
identification of any issues.
1
2
3
4
ABILITY TO ATTRACT/
RETAIN/MOTIVATE PEOPLE
Our people are an essential part of our
business and our culture. Particularly
in the current environment, we may be
unable to attract and retain the right
talent within Greggs.
OPERATIONAL
We may be unable to continue to
deliver the product range and
service standards that our
customers want and expect from us.
The loss of existing resource
results in additional recruitment,
which in turn creates workload
and training requirements.
Ultimately, we may be unable to grow
the business in line with our strategy.
– We recognise that our people are a key asset to the business,
and offer competitive packages, along with extensive training
and development opportunities.
– Colleagues have a range of ways to communicate their ideas
for improvement, including annual opinion surveys, listening
groups and colleague inclusion networks.
– Our succession planning process has been extended to
encompass our wider management teams.
– Recruitment processes have been improved to allow us to fill
vacancies quickly and effectively.
1
2
3
4
5
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
64
Risk and description Impact Key mitigations Strategic pillars Movement
DAMAGE TO
REPUTATION
As we grow our social media presence,
and engage more with our customers,
there is a risk of damage to our brand
if we fail to respond quickly and
appropriately to an incident.
STRATEGIC
Customers could lose their trust in
the brand, ultimately impacting on
our ability to grow our estate and
achieve our objectives. Shareholder
value could be reduced.
– We have a robust crisis management process in place, which
we test regularly. This is supported by appropriate third parties
(such as PR agencies) where specialist advice is required.
– Brand risk has been considered as a ‘deep dive’ topic by our
Risk Committee.
– All of our shops are required to follow established procedures,
to ensure that our food complies with required standards.
– Our audit team assesses compliance with standards, across
both company-managed and franchise shops.
2
3
SIGNIFICANT FOOD
SAFETY INCIDENT/
PRODUCT QUALITY ISSUE
We may produce and/or sell products
which are unsafe, or not of the
appropriate quality. This could be a
result of incorrect labelling of allergens,
product contamination, or a failure to
correctly follow procedures.
OPERATIONAL
There could be harm to our
customers or colleagues.
Our reputation as a trusted brand
could be significantly impacted,
which in turn would affect our
financial performance. We could
also be exposed to significant
fines.
– All new external suppliers require formal approval.
– All ingredients and products have specifications, to ensure
consistency.
– Allergen risk assessments are in place.
– Our teams are well-trained, with specialists able to provide
additional knowledge.
– We have a Primary Authority relationship in place, which gives
independent assurance that our processes and procedures
are adequate.
– Audits are undertaken by our internal teams, and external
bodies, with a focus on food safety.
– Our complaints process ensures all matters are investigated.
When a root cause is identified, we take action to address it.
1
2
3
4
5
CHANGES IN THE
REGULATORY LANDSCAPE
New regulatory requirements could be
implemented, driven by environmental,
health or other concerns.
LEGAL/REGULATORY
It may be necessary for us to make
changes to our product range.
Without the ability to respond
quickly, we could lose market share.
We believe that we have greater
exposure in some areas than our
competitors.
– Regular horizon-scanning activities are undertaken by
our teams, and we receive advisory information across all
professional disciplines.
– We engage with Trade Associations and government bodies
to ensure we are updated with developments.
– Participating in industry forums gives us an opportunity
to influence decision-making.
1
2
3
4
RISK MANAGEMENT CONTINUED
PRINCIPAL RISKS AND UNCERTAINTIES
CONTINUED
STRATEGIC PILLARS
1
Great tasting, freshly prepared food
2
Best customer experience
3
Competitive Supply Chain
4
First class support teams
5
The Greggs Pledge
65Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORT
STRATEGIC REPORT
VIABILITY STATEMENT
The Directors have assessed the Group’s prospects and
viability taking into account its current position, plans and
principal risks. In carrying out its assessment the Board
has reviewed the three-year operational and financial plans
to 2026. This is the period over which the Board reviews
management’s business planning and sets performance
targets, and therefore the Board believes that this remains
the most appropriate timeframe over which to make the
viability assessment.
The Directors have carried out a robust assessment of the
principal risks facing the Group, including those that would
threaten its business model, future performance, solvency
or liquidity.
The principal risks to which the Group is exposed ultimately
affect the ability of its shops to trade successfully, either due
to reduced demand or because of operational interruptions,
including those to its internal Supply Chain. A significant loss
of sales is particularly damaging given the Group’s vertical
integration in that the cost of the internal Supply Chain
cannot be reduced quickly.
Scenarios were modelled to stress-test the Group’s financial
resilience to the impact arising from occurrence of the
following principal risks:
1. Pandemic threat – the risk that the Group is forced to
close its shops to walk-in customers for three months as
a result of lockdown rules, and subsequently experiences
subdued levels of walk-in trade as the economy recovers
(starting at 70% of previously forecast sales in January
2025, building back to 100% by the start of 2026). Delivery
channel sales are assumed to continue through the
lockdown months, with a 2.5x increase in volume as
customers switch channels, as are ‘bake at home’ sales
through the Group’s wholesale relationship with Iceland.
This forward scenario assumes that government support
would be available for employment costs and that relief
from business rates would be available during the periods
of forced closure.
2. A brand-damaging food scare resulting in a significant
one-year sales reduction (c. 25% sales reduction for initial
six months) followed by gradual recovery of confidence.
In making assumptions the Directors considered real
examples of companies in the food sector that had
experienced such issues.
3. Temporary loss of production capacity for the Group’s
iconic pastry savoury products and the consequences
for liquidity as capacity is restored.
In each case the Directors reviewed the mitigating actions
that would be necessary to protect the Group’s liquidity.
These included:
• The temporary suspension of dividend payments in order
to preserve cash for operational use;
• Restriction of capital expenditure whilst protecting
essential infrastructure maintenance and commitments
to strategic investments;
• Access to government support;
• Drawing on existing committed financing facilities; and
• Calling on the Group’s insurance arrangements on the
occurrence of an insured risk.
The scenarios tested were capable of being managed within
the Group’s existing, committed financing facilities (including
an assumption that existing facilities will be renewed on
consistent terms in advance of their expiry in December
2025) with no forecast breaches of lending covenants. Given
the opening cash position in 2024 the Group has sufficient
existing and committed financing facilities to manage in a
situation where multiple principal risk scenarios occur
concurrently. This will likely not be the case in future years as
we increase capital expenditure and reduce the Group’s cash
position. In the event of multiple principal risk scenarios
occurring the Directors believe that the borrowing capacity
of the Group would be sufficient to allow it access to
temporary additional facilities.
Based on the results of the analysis, the Directors have
a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the three-year period of their detailed assessment.
66
BOARD OF DIRECTORS AND SECRETARY
MATT DAVIES
Chair
ROISIN CURRIE
Chief Executive
RICHARD HUTTON
Chief Financial Officer
MOHAMED ELSARKY
Non-Executive Director
Matt is a widely experienced retailer and was
previously the CEO of Tesco UK&ROI, before
which he held CEO positions at Pets at Home
and Halfords. As a Non-Executive Director,
Matt chaired N Brown Group plc and was
on the Board of Dunelm Group plc.
Roisin was appointed Chief Executive from
the role of Retail and Property Director.
Priorto joining Greggs in 2010, Roisin
workedat Asda where she held various
People Director roles, including
responsibilityfortheorganisation’s
retailanddistributionoperations.
Richard qualified as a Chartered Accountant
with KPMG and gained career experience
with Procter and Gamble before joining
Greggs in 1998.
Mohamed is currently the Group Chief
Executive Officer of The Unifrutti Group
and is an experienced international food
manufacturing executive, who has held senior
positions in Kelloggs, Danone and Godiva
Chocolatier. Mohamed has previously held
Non-Executive Director positions including
at Nomad Foods, a company listed on the
New York Stock Exchange.
Appointed since
2 August 2022
Appointed since
1 February 2022
Appointed since
13 March 2006
Appointed since
21 June 2021
Independent
Yes
Independent
n/a
Independent
n/a
Independent
Yes
Committee membership
Chair of Nominations Committee.
External appointments
Chair of AutoTrader and a number of private
equity-owned businesses, including
Hobbycraft and Travel Counsellors, and is an
Operating Partner at Advent International.
External appointments
Chair of the Employers Forum For Reducing
Re-offending. Trustee of Duke of Edinburgh
Awards Scheme.
External appointments
Non-Executive Director and Chair of the
Audit Committee of The Lakes Distillery
Company plc. Trustee Director of
Business in the Community.
Trustee of The Greggs Foundation.
Committee membership
Member of Audit, Remuneration and
Nominations Committees.
External appointments
Unifrutti Group CEO, Executive Chairman
the Nu Company GmbH, Senior Advisor
Bain Partners.
67Greggs plc Annual Report and Accounts 2023
ACCOUNTS
DIRECTORS’ REPORTSTRATEGIC REPORT
KATE FERRY
Non-Executive Director
LYNNE WEEDALL
Non-Executive Director
NIGEL MILLS
Senior Independent Non-Executive Director
JONATHAN JOWETT
Company Secretary and General Counsel
Kate is currently Chief Financial Officer at
Burberry Group plc. Prior to joining Burberry
Group, Kate was Chief Financial Officer of Maclaren
Group and TalkTalk Group and has previously held
positions on the Dixons Carphone plc Executive
Committee. Kate began her career in audit with
PricewaterhouseCoopers, qualifying as an ACA
before moving to Merrill Lynch as a Director
within the retail sector equity research team.
Lynne has been involved in the retail sector
throughout her career, latterly as Group People
and Culture Director for Selfridges Group.
Prior to joining Selfridges Group, Lynne
was Group Director of Human Resources at
Dixons Carphone plc (now Currys plc) and has
previously held senior positions in companies
such as Whitbread plc and Tesco plc.
Nigel has extensive expertise in financial
markets, investors, and governance, having
been Chief Executive at Hoare Govett and Chair
of Corporate Broking at Citi Group, advising a
wide range of companies including a significant
number within the consumer sector.
Jonathan is a lawyer by profession and has
held the position of Company Secretary for
a number of FTSE 250 and FTSE Smallcap
companies. His previous employers include
Avon Cosmetics Limited, SSL International plc,
Wagon plc and Bakkavor Group.
Appointed since
1 June 2019
Appointed since
17 May 2022
Appointed since
7 March 2023
Appointed since
12 May 2010
Independent
Yes
Independent
Yes
Independent
Yes
Independent
n/a
Committee membership
Chair of Audit Committee. Member of
Remuneration and Nominations Committees.
External appointments
CFO Burberry Group plc, Chair of Audit Committee
– British Olympic Committee Foundation.
Committee membership
Chair of Remuneration Committee. Member
of Audit and Nominations Committees.
External appointments
Senior Independent Non-Executive Director
and Remuneration Committee Chair at
Dr. Martens plc and Softcat plc. Non-Executive
Director of Stagecoach Limited. Member of
The Prince’s Trust Council.
Committee membership
Member of the Audit, Remuneration
and Nominations Committees.
External appointments
Senior Independent Non-Executive Director
role at both John Wood Group PLC and at
Persimmon plc.
External appointments
Member of the British Retail Consortium Policy
Board. Senior Independent Non-Executive
Director of Newcastle Hospitals NHS
Foundation Trust. Chair of Trustees of the
Great North Air Ambulance Service.
68
GOVERNANCE REPORT
Dear Shareholder
Welcome to my introduction to the Governance section
of the Greggs Annual Report 2023, which covers my first
full year as Chair.
Board changes in 2023
During the year we gave our thanks to Sandra Turner and
Helena Ganczakowski, who had both served nine-year terms
and who stepped down from the Board following the AGM
in May. We welcomed Nigel Mills as our Senior Independent
Non-Executive Director, who joined us in March. Nigel has
had a distinguished executive career having been Chief
Executive of Hoare Govett and Chair of Corporate Broking
at Citi Group. He has brought expertise in financial markets,
investors and governance, and invaluable experience of
providing independent challenge.
Culture and purpose
We strongly believe that our colleagues and their
contribution to our culture and values is what makes Greggs,
Greggs, as we seek to pursue our objective of making freshly
prepared food available to everyone. In support of this, we
are changing some of the emphasis of our governance
reporting to highlight Our People, which can be seen on
pages 36 to 42 . In highlighting our colleagues in a separate
section of the Annual Report, we are seeking to highlight
the key role our people play in Greggs’ success – part of
our ‘secret sauce’. Those pages include how we set about
listening to our colleagues, how we embrace diversity though
various colleague inclusion networks, gender reporting, how
we develop our colleagues, and much more.
The Greggs Pledge, our sustainability plan, has now
completed three years of its first five-year iteration. We
continue to make good progress with all of our objectives,
achieving most, but with some requiring more work.
The commitment of our teams to The Greggs Pledge is
unwavering, and I’d encourage you to read more of the
detail on pages 43 to 45 of this Report, and online at:
corporate.greggs.co.uk/doing-good. During 2024, the team
will be looking to evolve The Greggs Pledge, building on
existing commitments and adding new ones as appropriate,
to make sure that they are aligned with our purpose and
stakeholder expectations.
Governance and reporting
The Board generally meets seven times per year, when we
have a formal agenda, and additional meetings are set up
as required for specific items, or such matters are delegated
to ad hoc committees and reported upon at subsequent
meetings. We aim to spend time across our shops,
production and distribution centres, and central offices
being as visible as we can in the time available. For example,
in September 2023 the Board met at the Greggs Technical
Centre in the North East, the home of our Food Zone, where
new products are developed and tested.
More details of the Board’s activities, and key decisions
taken during the year, are set out later in this section of
our Annual Report.
I’m pleased to say that we were compliant with the UK
Corporate Governance Code (2018) (‘the Governance Code’)
throughout the year, and the following pages set out further
details. I invite you to consider that alongside the report on
how the Directors have fulfilled their duties in accordance
with s172 Companies Act 2006.
We continue to encourage all shareholders, particularly
those with smaller holdings, to attend our ‘in person’ annual
general meeting, which will be held in Newcastle on 15 May
2024. This provides a great opportunity to hear from and
speak with members of the Board and Operating Board,
followed by lunch including all your Greggs favourites.
Matt Davies
Chair
5 March 2024
CHAIR’S INTRODUCTION
69Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
DIRECTORS’ REPORT AND GOVERNANCE REPORT
This Governance Report sets out how the
Company has applied the principles in the 2018
UK Corporate Governance Code during its financial
period ended 30 December 2023. A copy of the
Code is available at https://www.frc.org.uk/
directors/corporate-governance/uk-corporate-
governance-code .
Board composition, succession and evaluation
During the year, there were a small number of changes
to the Board. As outlined in last year’s Report both Helena
Ganczakowski and Sandra Turner stepped down from the
Board immediately following the AGM held on 17 May 2023.
Nigel Mills had joined the Board on 7 March 2023, and
following Sandra Turner’s retirement he became
Senior Independent Non-Executive Director.
We were also very grateful to Mohamed Elsarky, who took
on the role of Non-Executive Director having oversight of
our colleague engagement activities.
We confirm, as at 30 December 2023, that at least 40%
of the Board are women, one senior position is held by a
woman and that at least one Director comes from an ethnic
background. The following table shows the gender and
ethnicity split in the Company as at 30 December 2023:
Board
Operating
Board
1
All
colleagues
Gender
Male 4 5 11,314
Female 3 3 20,318
7 8 31,632
2
Ethnicity
White British or other
White (including minority-
white groups) 6 8 23,970
Mixed/Multiple Ethnic
Groups – - 841
Asian/Asian British - - 2,646
Black/African/Caribbean/
Black British - - 1,445
Other ethnic group
including Arab 1 - 487
Not specified/prefer not to
say - - 2,442
7 8 31,831
1 Excluding Chief Executive and Chief Financial Officer
2 There are 197 colleagues whose gender is recorded as ‘Unknown’, ‘Undeclared’
or ‘Other’ hence the total figure of 31,839 is not the sum of the Female and Male
totals.
Further details outlining our commitment to diversity and
inclusion are provided in the ‘Our People’ section of this
Annual Report on pages 36 to 42 .
We have a relatively small Board of Directors, and as such
we have historically appointed all Non-Executive Directors
onto each Committee, separately chaired by Directors with
relevant experience. We continue to adopt that practice
which works well for us.
When any new Director is appointed, they undergo an
induction process that includes accompanied visits
to shops, production centres and distribution sites, as well
as meeting key team members of senior management.
Each year, the Board determines the appropriate form of
evaluation to be undertaken, including the frequency of
seeking the support of an external facilitator. In 2021, the
Board engaged the services of Grant Thornton to facilitate
its evaluation, part of which included use of the BoardClic
software. That software was again used in 2022, in order
to develop some trend analysis of the Board’s assessment
of itself and its Committees.
Following the Board’s review for 2022, it determined key
areas for focus should include:
• Continued reporting on the Company’s sustainability
programme, The Greggs Pledge
• A detailed review of the Company’s approach to risk
management
The Board determined that BoardClic software be used for a
third time to form the basis of the review of 2023. That review
was undertaken across the turn of the year, and the report
that was generated was considered by the Board when it met
in January 2024, including the Chair discussing the strengths
and areas of improvement identified. The Board’s attention
will increasingly be focused on sustainability, as The Greggs
Pledge evolves, and the Remuneration Committee intends
to develop its thinking on setting appropriate long-term
incentives with performance-related reward increasingly
directed towards our net zero ambitions.
70
DIRECTORS’ REPORT AND GOVERNANCE REPORT CONTINUED
Sharing Board responsibility
There is a written statement of the split of responsibilities
between the Chair and the Chief Executive. Matt was
considered as ‘independent’ on his appointment, and he
continues to be so.
There is also a written statement of the responsibilities of
the Senior Independent Non-Executive Director. Sandra
Turner held the role until she stepped down from the Board
following the AGM on 17 May 2023, from which time Nigel Mills
took on the role. Nigel is also the Senior Independent Director
at Persimmon plc and John Wood Group PLC.
During the year, Matt Davies held regular and informal
conversations with the Non-Executive Directors, collectively
and individually ensuring that they had plenty of opportunity
to raise any concerns that they might have or to express
opinions. Matt also had regular sessions with the Executive
Directors and members of the Operating Board.
Following the outcome of the Board Evaluation for 2023,
Nigel met with the Executive and Non-Executive Directors
in the absence of the Chair, in order to discuss the Chair’s
performance during the year, and to give the Non-Executive
Directors the opportunity to make any further comments.
The Board has three main Committees, being the Audit,
Remuneration and Nominations Committees, each chaired by
an independent Non-Executive Director. Terms of reference
for each of the Committees were last reviewed by the
respective Committee in November 2023, and recommended
to the Board and re-adopted in December 2023. The
re-adopted Terms of Reference can be found on the corporate
website. Details of the work of those Committees can be
found on pages 80 to 85 (Audit Committee Report),
pages 86 to 110 (Directors’ Remuneration Report),
and page 70 (Nominations Committee update).
The Board generally schedules seven meetings in each year,
plus an annual formal strategy meeting and then meets from
time to time as may be required. Board and Committee
meetings are well attended, and attendance is set out in
the following table:
Attendance Board
Audit
Committee
Remuneration
Committee
Nominations
Committee
Matt Davies 7/7 – – 3/3
Roisin Currie 7/7 – – –
Richard Hutton 7/7 – – –
Mohamed Elsarky 7/7 4/4 4/4 3/3
Kate Ferry 7/7 4/4 3/4 3/3
Lynne Weedall 7/7 4/4 4/4 3/3
Nigel Mills* 5/5 2/2 2/2 2/2
Sandra Turner** 3/3 2/2 2/2 1/1
Helena
Ganczakowski** 3/3 2/2 2/2 1/1
* Nigel Mills was appointed to the Board on 7 March 2023.
** Sandra Turner and Helena Ganczakowski stepped down from the Board following
the AGM held on 17 May 2023.
Nominations Committee update
The Nominations Committee is chaired by the Board Chair
and has terms of reference that are reviewed each year,
approved by the Board and adopted by the Committee. Those
terms of reference, which are available on the Company’s
corporate website, set out the responsibilities of the
Committee. All of the Non-Executive Directors are members
of the Committee, in line with the Board’s current policy of
having all Non-Executive Directors appointed to each of the
three main Committees. The Chief Executive is a regular
attendee at Nominations Committee meetings, and from
time to time the Chief Financial Officer and the People
Director are also invited.
The Committee’s primary responsibility is to ensure plans are
in place for orderly succession to the Board, and also to the
Operating Board, when that is not reviewed by the Board
as a whole. During 2023, the Board received a presentation
from the Chief Executive and from the People Director on the
succession plan for the Operating Board Directors, to include
a review of potential candidates and their proximity to being
ready to take up an appointment as and when appropriate.
During the year the Nominations Committee recommended
tothe Board the appointment of Nigel Mills as Senior
Independent Non-Executive Director. In reaching its
recommendation, an extensive search was conducted,
supported by Heidrick & Struggles (who have no connection
with the Company or any individual Director). The appointment
process included the development of a Role Profile, a
candidate assessment process conducted by Heidrick &
Struggles, a number of meetings with all members of the
Board as well as taking formal and informal references; the
Board formally appointed Nigel with effect from 7 March 2023.
In selecting new Non-Executive Directors the Nominations
Committee uses a skills matrix to assess the necessary
and preferred attributes in potential candidates. The
Nominations Committee also takes into account other
demands on potential candidates’ time and asks them to
confirm they will be able to commit the necessary time to
Greggs, with that commitment ultimately being included
in the Letter of Appointment.
The Nominations Committee has considered the
contribution of each of the Directors, and has confirmed
to the Board its recommendation that all Non-Executive
Directors including the Chair should be re-appointed at
the AGM in May 2024.
The Nominations Committee continues to review the Board’s
skills and diversity mix and it has appointed Spencer Stuart
(who have no connection with the Company or any individual
Director) to assist with this and the recruitment of any
further Non-Executive Directors.
71Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
Board activity in the year
The Board made a number of key decisions across the year,
which included the decision to fund the development of two
sites in the Midlands; one in Derby, and one in the Kettering/
Corby area – both to support future shop growth. In summer
2023 the Board approved the settlement of Covid-19
business interruption insurance litigation. Other matters
considered across the year included:
January Budget for 2023; annual risk review;
Governance Report for the Annual Report;
and Board evaluation.
March Preliminary results and Annual Report; review
of dividend policy; consideration of a modern
slavery issue at a supplier.
May AGM preparation including consideration of
proxy adviser reports and voting. Externally
facilitated deep dive into risk management;
capital expenditure approval for distribution
centre development.
June The annual strategy meeting where topics
included shop of the future; evening daypart &
delivery; estate development; driving loyalty;
The Greggs Pledge; plus settlement of Covid-19
Business Interruption insurance litigation.
July Interim results; business plan 2024 progress
updates. Options to de-risk the defined benefit
pension scheme.
September Capital expenditure for the development of two
Midlands-based production and distribution
campuses; international opportunity
development; healthy and sustainable menu;
share register development and Company
valuation.
November A presentation on the outcomes of the annual
employee opinion survey; franchise strategy;
succession planning; delivery update and
second delivery partner; first draft of the budget.
Diversity and inclusion (‘D&I’)
The Board as a whole, rather than the Nominations
Committee, monitors the gender balance in the Company.
The required disclosures are set out on page 69 of this
Report and are incorporated by reference into the Strategic
Report. The section, titled ‘Our People’, contains information
about our colleague inclusion networks, team development,
and engagement activity.
As part of the DTR 7.2.8A disclosure, pages 43 to 45 are
incorporated by reference into this Directors’ Report.
Other disclosures
Directors and their interests
The names of the Directors in office during the year, together
with their relevant interests in the share capital of the
Company at 1 January 2023 and 30 December 2023 are set
out in the Directors’ Remuneration Report on page 108 .
Details of the Directors’ share options are set out in the
Directors’ Remuneration Report on page 106 .
Directors’ indemnities and conflicts
As at the date of this Report, indemnities are in force under
which the Company has agreed to indemnify the Directors,
to the extent permitted by law, in respect of losses arising
out of, or in connection with, the execution of their duties,
powers or responsibilities as Directors of the Company.
The indemnities do not apply in situations where the relevant
Director has been guilty of fraud or wilful misconduct.
Under the authority granted to them in the Company’s
articles of association, the Board has considered carefully
any situation declared by any Director pursuant to which
they have or might have a conflict of interest and, where
it considers it appropriate to do so, has authorised the
continuation of that situation. At each Board meeting, a
Schedule of Potential Conflicts of Interest is reviewed and
Directors are asked to declare any new or changed interests.
In exercising their authority, the Directors have had regard to
their statutory and other duties to the Company. All Directors
have access to the Company Secretary as and when required.
Substantial shareholdings
At 4 March 2024 the only notified holdings of substantial
voting rights in respect of the issued share capital of the
Company (which may have altered since the date of such
notification, without any requirement for the Company to
have been informed) were:
Shareholder
Number of shares
held
Percentage of
issued share
capital
Schroders plc 5,108,595 5.0%
Royal London Asset
Management
5,050,276 4.94%
Aviva plc 3,941,313 3.85%
BlackRock, Inc. not disclosed <5.0%
Additional information
• Future business developments: details of future business
developments can be found throughout the Strategic
Report on pages 22 to 33 .
• Financial risk management: details of our financial risk
management policies and objectives can be found in
Note 2 of the accounts.
• The information set out within the Governance Report
in pages 68 to 74 forms part of the Directors’ Report.
• Greenhouse gas emissions: All disclosures concerning
the Group’s greenhouse gas emissions (as required to
be disclosed under the Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013) are
contained in the TCFD Report on pages 46 to 53 .
• Dividends: details of the dividends declared and paid
are given in Note 23 of the accounts.
• Stakeholder engagement: details of the Group’s
engagement with colleagues, suppliers, customers
and others are given on pages 75 to 79 .
72
DIRECTORS’ REPORT AND GOVERNANCE REPORT CONTINUED
Non-financial and sustainability information
regulations
The information required by sections 414CA and 414CB of the
Companies Act 2006 is included within the Strategic Report
on page 65 and the Directors’ Report on pages 66 to 112 .
Authority to purchase shares
At the AGM on 17 May 2023, the shareholders passed a
resolution authorising the purchase by the Company of its
own shares to a maximum of 10,100,000 ordinary shares of
two pence each.
That authority had not been used as at 30 December 2023.
The authority remains in force until the conclusion of the
AGM in 2024 or 17 August 2024, whichever is the earlier.
It is the Board’s intention to seek approval at the 2024 AGM
for the renewal of this authority.
Takeover directive information
Following the implementation of the European Directive
on Takeover Bids by certain provisions of the Companies Act
2006, the Company is required to disclose certain additional
information in the Directors’ Report. This information is set
out below:
• The Company has one class of share in issue being
ordinary shares of two pence each. As at 4 March 2024,
there were 102,255,675 such ordinary shares in issue.
There are no shares in the Company that grant the holder
special rights with regard to the control of the Company;
• At general meetings of the Company, on a show of hands,
every shareholder present in person or by proxy has one
vote only and, in the case of a poll, every shareholder
present in person or by proxy has one vote for every share
in the capital of the Company held;
• The Company’s articles of association set out
the circumstances in which shares may become
disenfranchised. No shareholder is entitled, unless the
Directors otherwise determine, in respect of any share held,
to be present or vote at a general meeting either personally
or by proxy (or to exercise any other right in relation to
meetings of the Company) in respect of that share in certain
circumstances if any call or other sum is payable and
remains unpaid, if the shareholder is in default in complying
with a duly-served notice under section 793(1) of the CA
2006 or if any shareholder has failed to reply to a duly-
served notice requiring them to provide a written statement
stating they are the beneficial owner of the shares;
• A notice convening a general meeting can contain a
statement that a shareholder is not entitled to attend
and vote at a general meeting unless their name is entered
on the register of members of the Company at a specific
time (not more than 48 hours before the meeting) and if a
shareholder’s name is not so entered, they are not entitled
to attend and vote;
• Under the Company’s articles of association the Directors
may, in their absolute discretion, refuse to register the
transfer of a share in certified form in certain
circumstances where the Company has a lien on the
share (provided that the Directors do not exercise their
discretion so as to prevent dealings in partly-paid shares
from taking place on an open and proper basis), where
a shareholder has failed to reply to a duly-served notice
under section 793(1) CA 2006 or if a transfer of a share
is in favour of more than four persons jointly. In addition,
the Directors may decline to recognise any instrument
of transfer unless it is in respect of only one class of share
and is deposited at the address at which the register of
members of the Company is held (or at such other place
as the Directors may determine) accompanied by the
relevant share certificate(s) and such other evidence
as the Directors may reasonably require to show the
right of the transferor to make the transfer. In respect
of shares held in uncertificated form the Directors may
only refuse to register transfers in accordance with the
Uncertificated Securities Regulations 2001 (as amended
from time to time);
• Under the Company’s code on dealings in securities
in the Company, persons discharging managerial
responsibilities and some other senior executives may
in certain circumstances be restricted as to when they
can transfer shares in the Company;
• There are no agreements between shareholders known
to the Company, which may result in restrictions on the
transfer of shares or on voting rights;
• Where, under a colleague share plan operated by the
Company, participants are the beneficial owners of
shares but not the registered owner, the voting rights
are normally exercised by the registered owner at the
direction of the participant;
• The Company’s articles of association may only be
amended by special resolution at a general meeting
of the shareholders;
• The Company’s articles of association set out how
Directors are appointed and replaced. Directors can be
appointed by the Board or by the shareholders in a general
meeting. At each AGM, any Director appointed by the
Board since the last AGM must retire from office but is
eligible for election by the shareholders. Furthermore,
the Board has resolved that, in line with the Corporate
Governance Code (2018 revision), all the Directors will
be subject to annual re-election by shareholders. Under
the CA 2006 and the Company’s articles of association,
a Director can be removed from office by the
shareholders in a general meeting;
73Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
• The Company’s articles of association set out the powers
of the Directors. The business of the Company is to be
managed by the Directors who may exercise all the
powers of the Company and do on behalf of the Company
all such acts as may be exercised and done by the
Company and are not by any relevant statutes or the
Company’s articles of association required to be
exercised or done by the Company in general meeting,
subject to the provisions of any relevant statutes and the
Company’s articles of association and to such regulations
as may be prescribed by the Company by special
resolution;
• Under the CA 2006 and the Company’s articles of
association, the Directors’ powers include the power to
allot and buy back shares in the Company. At each AGM
resolutions are proposed granting and setting limits on
these powers;
• The Company is not party to any significant agreements
which take effect, alter or terminate upon a change in
control of the Company, following a takeover bid; and
• There are no agreements between the Company and
its Directors or colleagues providing for compensation
for loss of office or employment (whether through
resignation, purported redundancy or otherwise) that
occurs because of a takeover bid. However, provisions
in the colleague share plans operated by the Company
may allow options to be exercised on a takeover.
Significant relationships
The Group does not have any contractual or other
relationships with any single party which are essential to the
business of the Group and, therefore, no such relationships
have been disclosed.
Colleagues
What makes Greggs so special is its culture – the way our
colleagues encourage and support each other. We want
everyone to feel welcome at Greggs and our colleagues to be
able to be themselves at work, whatever their background,
preferences or views. Where colleagues or prospective
colleagues have a disability then discussions will be had with
individuals to review any adjustments required and every
effort will be made to support them. Greggs is committed to
creating a work environment free of discrimination, bullying,
harassment and victimisation, where everyone is treated
equally with dignity and respect. This applies in all aspects of
employment including recruitment and selection, promotion,
transfer, training or other developmental opportunities, pay
and benefits, other terms of employment, discipline and
selection for redundancy. Our colleague networks, covering
LGBTQ+, ethnicity and disability provide valuable insight and
feedback and help us to develop training for our colleagues
and understand how we can improve the way we do things at
Greggs. Details on the contribution of our networks can be
found on page 38 .
Accountability, audit and going concern
The Board acknowledges its responsibility to present a fair,
balanced and understandable assessment of the Company’s
position and prospects. In order to assist the Board to
comply with the requirements within the Corporate
Governance Code, each year the Audit Committee is
requested to undertake an assessment of the Annual Report
and to make a recommendation to the Board. This request
has been enshrined within the Audit Committee’s terms of
reference, which are available at corporate.greggs.co.uk.
The actions undertaken by the Audit Committee in
confirming its advice to the Board included the consideration
of a detailed review that has been undertaken by the Head of
Business Assurance and reviewing the Annual Report as a
whole to confirm that it presents a fair, balanced and
understandable assessment. In considering the advice of
the Audit Committee, and having reviewed the Annual Report
including the contents of the Strategic Report on pages 1 to
65 , together with the statutory accounts themselves, the
Board duly considers the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable,
and provides the necessary information for shareholders
to assess the Company’s performance, business model
and strategy.
A statement of Directors’ responsibilities in respect of the
preparation of accounts is given on pages 111 and 112 .
A statement of auditor’s responsibilities is given in the
report of the auditor on page 117 .
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future.
For this reason, they continue to adopt the going concern
basis in preparing the accounts (see basis of preparation
on page 125 ). The Board’s viability statement made in
accordance with Corporate Governance Code Provision 31
can be found on page 65 .
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DIRECTORS’ REPORT AND GOVERNANCE REPORT CONTINUED
Policies
Freedom of association
At Greggs, we recognise the right of all colleagues to
freedom of association and collective bargaining. Whilst
we do not have a formal freedom of association policy, the
Company encourages all its colleagues in Supply sites, shops
and offices to become, and remain, members of a union.
Bribery and corruption
Greggs has an anti-bribery and corruption policy which
applies to all employees and prohibits the offering, giving,
seeking or acceptance of any bribe in any form to any person
or company acting on its behalf, in order to gain an advantage
in an unethical way.
Business conduct
We have a specific policy that sets out the standards of
ethical behaviour that are expected of all employees. Graded
managers, and all members of the procurement department,
are required to make an annual confirmation of their
compliance with the policy.
Whistle-blowing
Our ‘whistle-blowing’ policy creates an environment
where employees are able to raise concerns without fear
of disciplinary action being taken against them as a result of
any disclosure. Any matters raised are treated in confidence
and an independent review will be undertaken where it is
appropriate. The Chair of the Audit Committee is the
designated first point of contact for any concerns which
cannot be addressed through normal management
processes.
Political donations
Greggs has a clear policy forbidding political donations
or contributions. This includes financial and in-kind
contributions made by the Company.
Disclosure of information to the auditor
Each of the Directors who held office at the date of approval
of this Directors’ Report confirms that, so far as they are
individually aware there is no relevant audit information of
which the Company’s auditor is unaware and that they have
taken all the steps that they ought to have taken as a Director
to make themselves aware of any relevant audit information
and to establish that the Company’s auditor is aware of that
information.
By order of the Board
Jonathan D Jowett
Company Secretary
5 March 2024
Greggs plc (CRN 502851)
Greggs House, Quorum Business Park
Newcastle upon Tyne NE12 8BU
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75Greggs plc Annual Report and Accounts 2023
OUR STAKEHOLDERS
The views of our key stakeholders and our
Company purpose remain front of mind
whenever the Board has decisions to make.
SECTION 172
STATEMENT
As a general rule, most of the day-to-day
engagement across our stakeholder groups is
undertaken by the Chief Executive and the Chief
Financial Officer, and under delegation to members
of the Operating Board, which is made up of the Chief
Executive’s direct reports. The Chief Executive and
Chief Financial Officer report back to the Board on
engagements of any significance, including with
shareholders, banks, colleagues and customers.
A series of activities are planned across the year
to which the Non-Executive Directors are invited.
These include listening groups with colleagues,
the annual management conference, and formal
and informal visits to shops and production and
distribution sites. At Board meetings, Directors
are invited to comment on their activities and
the key things they have learned.
The following pages 76 to 79 comprise
our section 172 statement and describe
how the Directors individually and
collectively, acting in good faith, have
exercised their duties over the course
of the year to promote the long-term
success of the Company for the benefit
if its members as a whole, and in doing
so have had regard to the matters set
out in section 172(1) (a) to (f) of the
Companies Act 2006.
76
CUSTOMERS
How and why we engage
With customer transactions running at over 8.5 million per
week, the ‘voice of the customer’ in Board decisions is of
significant value. That voice comes in the form of insight
reports and presentations from the Customer team, as well
as updates from the Chief Executive on how the Company
is performing in terms of share of market. By speaking to
customers in our shops, through our Customer Care and
Insight teams, and across our digital channels – we’re
constantly listening and learning so we can understand
how best to serve the nation.
1
2
4
5
Impact on Board decisions
One key element of the Board’s current strategy relates
to developing our delivery offering, having appointed a
second delivery partner in Uber Eats, to complement the
existing service from Just Eat. Such development requires
investment, in for example, shop wages to keep shops open
into the evening, and feedback from customers is critical in
determining the payback on that investment, ensuring that
the food offering is right and the opening hours are aligned
with footfall.
COLLEAGUES
How and why we engage
We strongly believe that our colleagues and their
contribution to our culture and values are what makes
Greggs, Greggs; they are our ‘secret sauce’. That is why
we have produced a separate section of our Annual Report
to show how and where we engage with colleagues, which
can be found on pages 36 to 42 . There you will find details
of our engagement with a variety of colleague groups,
including our diversity and inclusion networks, recognised
unions, along with our talent development activities and
many other interactions that the Board has with colleagues.
1
3
5
Impact on Board decisions
Ensuring that Greggs is a great place to work is fundamental
to our growth strategy. Opening 220 shops (gross) in 2023
required a significant effort in terms of workforce planning
and recruitment to ensure that we can open shops at pace.
We are also embarking on significant developments in
Supply Chain, building a production and frozen product
distribution centre in Derby, and with plans to open a chilled
and ambient distribution centre in the Kettering/Corby area
on a similar timescale. Both projects will require us to attract
good people to work for us, and the Board bears that in mind
when, through the Remuneration Committee, it considers
the benefits that are available across the workforce in order
to attract talent. Details of the review and improvement in
some colleague policies are given in the Remuneration
Committee Report.
SUPPLIERS
How and why we engage
We are heavily reliant on a wide range of suppliers to support
our business and its growth. These range from producers of
food ingredients for our manufacturing sites, commercial
and other company vehicles, uniform suppliers, an array
of service providers including shop fit-out contractors,
property advice, marketing support and factory
constructors, to name but a few. We use the Ariba platform
to qualify suppliers and a variety of tools to support our focus
on ethics and sustainability. To build and maintain good
relationships, we also hold regular meetings, undertake
joint projects and visit our suppliers.
1
2
3
4
5
Impact on Board decisions
Every year, our Chief Executive attends several ‘top-to-top’
meetings with selected suppliers, accompanied by the
Operating Board’s Commercial Director and other members
of the Operating Board as required. In 2023 these included
a meeting with Pilgrims and a visit to one of their farms
and Biffa which involved a tour of its recycling plant. These
meetings are to share business strategy and review joint
business plans against targets set.
OUR STAKEHOLDERS CONTINUED
STRATEGIC PILLARS
1
Great tasting, freshly prepared food
2
Best customer experience
3
Competitive Supply Chain
4
First class support teams
5
The Greggs Pledge
77Greggs plc Annual Report and Accounts 2023
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SHAREHOLDERS
How and why we engage
Our shareholders are the owners of the business, and we
have obligations to keep them apprised of significant
developments. One of the ways we do this is through our
regular reporting schedule and meetings with institutional
shareholders across the year, conducted mainly by the
Chief Executive and Chief Financial Officer.
We hold an AGM after which Directors mix with attendees
over a Greggs lunch. Shareholders are also given the
opportunity to engage with the respective Committee Chairs
at this meeting, to discuss any matters of significance that
they want to raise. As before the pandemic, our recent
‘in-person’ AGMs are well attended, and resolutions put
to the 2023 AGM were very well supported.
2
4
5
Impact on Board decisions
The Chief Financial Officer leads on the Board’s engagement
with institutional investors and analysts, has regular
interaction with existing and potential investors, and reports
to the Board on the key points that arise from those
meetings. At each Board meeting, a register of the top
shareholdings is tabled, including movements of buyers
and sellers. Following the Preliminary and Interim Results
Roadshows, the Board receives feedback from investors
and analysts on Company performance and levels of
engagement. Following his appointment in November 2022,
the Chair offered meetings to several major shareholders
to discuss the Company and to gain feedback on the
performance and management team, and this offer
will be repeated in 2024.
LENDERS
How and why we engage
Greggs is a cash-generative business and prior to the
pandemic had not needed to approach capital and debt
markets to fund its growth strategy. With the onset of the
pandemic, it became clear that it would be appropriate
and prudent to have in place a formal bank facility, and
consequently, towards the end of 2020, a revolving credit
facility of £100 million was put in place with two commercial
banks. Although that facility has been subsequently
extended, and remains undrawn, as part of that ongoing
relationship, the Finance team provide regular performance
and covenant compliance updates to banking partners.
1
2
3
4
5
Impact on Board decisions
In determining the use of cash resources, the Board has
regard to several stakeholders, including shareholders
(through the potential for dividend payments), colleagues
(through pay awards and bonus entitlements), and Greggs
defined benefit pension scheme obligations (through
managing the scheme alongside the Trustee to ensure it is
successful on its journey to de-risking in the next few years).
Should the Board authorise a drawdown of the revolving
credit facility, it would take that debt into consideration
when determining the allocation of cash resources.
As a result of previous funding of the defined benefit
pension scheme, and an improvement in financial markets,
the Company is currently supporting the Trustee as it
explores options to de-risk and secure members’ benefits.
COMMUNITIES
How and why we engage
Fundamental to The Greggs Pledge is our support for the
local communities in which we operate. We do this through
food donations, operating Greggs Outlets and sharing a
percentage of the profits with local community projects
focused on improving social mobility and tackling food
poverty, and through the Greggs Foundation Breakfast Club
programme in which we provide a nutritious breakfast to
62,000 children every school day who may have otherwise
gone without. We also use our shops nationwide to collect
donations on behalf of Children in Need, the Disasters
Emergency Committee, and the Royal British Legion
Poppy Appeal.
1
5
Impact on Board decisions
Knowing that there are so many communities in need of
our support drives the Board to continue donating at least 1%
of profits to the Greggs Foundation. In November 2023, over
£1million was raised for Children in Need. Recognising that
food allergens are a significant and growing consumer issue,
the Board has approved further donations to the Natasha
Allergy Research Foundation, contributing to important work
in determining the causes and prevention of food allergies.
78
Below, by stakeholder, are some examples of the activities undertaken by the Board, or relevant information that was presented to them.
OUR STAKEHOLDERS CONTINUED
COLLEAGUES
Attendance at Greggs Negotiating
Committee meetings
Attendance at listening groups with
our Retail Operations Managers and
manufacturing colleagues
Findings from the Your Opinion Matters
Survey (see more on page 37 )
Undertaking shop visits to meet our
shop teams
Participating in colleague
development days
CUSTOMERS
Progress report on
Greggs App development
Market insight presentations
Pricing strategy and impact of inflation
Attendance at a menu tasting
session with our category and food
development teams
Attendance at
‘Customer of the Future’ session
Presentations from
Customer Insight team
SHAREHOLDERS
Declaration of interim dividend
Annual General Meeting
Share register monitoring and
development of an engagement plan
Investor relations strategy review
and the allocation of resource
79Greggs plc Annual Report and Accounts 2023
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Colleague engagement
Board engagement
There have been a number of engagement events across the
year when Board members had the opportunity to meet with
colleagues. Following the AGM in May 2023, Mohamed
Elsarky was appointed as the Non-Executive Director with
responsibility for colleague engagement, and in that role
he has met with the People Director on several occasions
to plan engagement activities. These have included visiting
three Supply sites across the country, and meeting with an
Area Manager group within the Retail team. In February 2024,
Mohamed attended a meeting with our Race, Ethnicity and
Cultural Heritage (‘REACH’) colleague inclusion networking
group, to hear in person from colleagues from across the
business who are from a diverse ethnic background.
Our Senior Independent Director, Nigel Mills, was
accompanied by the Greggs Foundation Manager on a visit
to a Breakfast Club in Greater London, to see how donations
to the Greggs Foundation benefit children in a school where
at least 50% of the children are entitled to a free school meal.
That was followed by a visit to a Greggs Outlet, where unsold
food from the main Greggs chain is sold at a reduced price,
and a share of the profits from which are distributed to
deserving causes in that community.
Union recognition and engagement
Details of engagement with recognised unions are set out
in the ‘Our People’ section of the Annual Report, found on
pages 36 to 42 .
Rewarding the workforce
Following our strong business performance in 2023, the
Board was again delighted to continue its long tradition of
sharing 10% of profits with colleagues, enabling them to
share in our success. Payments to qualifying colleagues
will be made in late March 2024.
In order to determine the annual pay award, each year
we undertake negotiations with the relevant trade unions
representing those colleagues covered under a collective
bargaining agreement. Following the successful conclusion
of the resulting ballot, our 2024 pay award agreed for our
wider workforce consisted of a base pay award of 8.0%,
with an additional 1.6% (9.6% in total) for our hourly-paid
Retail colleagues. On this basis, over 97% of our workforce
received a pay increase of 8% or more and 80% received
9.6% or more. This increase was applied from January 2024.
For our graded management population we once again
implemented a tiered pay award as the Board acknowledged
that cost-of-living pressures can have a disproportionate
impact on our lowest paid colleagues.
Our lower paid management colleagues therefore received
the base increase of 7.0%, whilst senior managers’ pay
awards ranged between 5.5% and 6.0%. It was agreed that
the pay award of both the Executive Directors and Operating
Board should be proportionally lower and it was
subsequently agreed by the Board at 4.5%.
As well as pay, we are delighted that our colleagues have
benefitted from a significant enhancement to our family
leave policies in 2023 and from January 2024 we have
increased the pension provision for our wider workforce,
allowing our colleagues to increase their pension
contribution up to 6% with matched employer contributions.
In order to further encourage colleague ownership in the
business we are also reducing the eligibility criteria to three
months service for all colleagues to participate in our
all-colleague share schemes.
Provision 36 of the Governance Code requires the
Remuneration Committee to develop a formal policy for
post-employment shareholdings. At the AGM in May 2023,
shareholders approved a new remuneration policy setting
out the post-employment holding requirement which applies
to all Executive Directors at the level of the shareholding
guideline prior to departure or the actual shareholding on
departure if lower. Full details can be seen in the Directors’
Remuneration Report on page 108 .
Shareholders
The Chair takes responsibility for ensuring that key
shareholders are aware of, and supportive of, the Board’s
approach to governance, from time-to-time meeting with
larger shareholders.
Much of the regular interaction with shareholders and the
analyst community is undertaken by the Chief Executive and
Chief Financial Officer, particularly around the times of the
release of the preliminary and interim results. In between,
the Chief Financial Officer is in regular contact with the
investment community sharing details of the Company‘s
performance and strategy. Following key announcements,
the anonymised views of shareholders are reported to the
Board by UBS and Investec, the Company’s retained brokers,
and press and analyst feedback is provided by Hudson
Sandler, the Company’s financial communications
consultant.
Other stakeholder considerations
Greggs is committed to acting fairly towards all stakeholders
of the Company. The impact of the Company’s operations on
the environment is covered in The Greggs Pledge report on
pages 43 to 45 . Our business conduct policy is available on
our website.
Roisin Currie
Chief Executive
5 March 2024
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AUDIT COMMITTEE REPORT
Dear Shareholder
As Chair of the Audit Committee, I am pleased to present
our Report for the 52 weeks ended 30 December 2023.
The Committee plays an important part in the Company’s
governance framework providing independent oversight
and robust challenge on the integrity of financial reporting,
quality and effectiveness of internal and external audit,
risk management and the system of internal control.
In this Report, I aim to share some of the Committee’s
discussions from the year, providing insight regarding the
role of the Committee, the main matters considered by it
during the year and the conclusions drawn. The Committee
meets formally at key times within the reporting calendar
and the agendas for its meetings are designed to cover
all significant areas of risk over the course of the year
and to provide oversight and challenge to the key financial
judgements, controls and processes that operate within
the Company.
During 2023, in addition to its regular oversight
responsibilities, the Committee has:
• Overseen the continuing development of our TCFD
reporting, including the process adopted to identify
theCompany’s climate-related risks and opportunities.
The TCFD Report is set out on pages 46 to 53 .
• Ensured that the Financial Reporting Council’s (‘FRC’)
keydisclosure expectations have been considered and
addressed in our financial reporting, paying particular
attention to any impact from current economic
conditions, including higher levels of inflation than
have been seen in recent years.
• Maintained an awareness of cyber security, and reviewed
the processes and controls in place across the business.
• Overseen the continuing implementation of our new ERM
framework, building engagement and visibility throughout
the business and ensuring that our approach remains
robust and fit for purpose.
The Committee continues to keep its activities under review
in the light of the Government’s audit and governance reform
agenda. The Committee has received regular updates
following the publication by the FRC of ‘Audit Committees
and the External Audit: Minimum Standard’ during 2023, and
the revision to the UK Corporate Governance Code. It intends
to adopt the Minimum Standard from 2024, although this is
unlikely to lead to any significant changes as the Committee
already adheres to the principals set out in the Standard.
As noted below, consideration of the Corporate Governance
Code’s new monitoring requirement in respect of risk
management and internal control will be a priority for the
Committee in 2024.
Key priorities for the Committee during 2024 will be:
• Overseeing the Company’s plans for the introduction of
the new requirement introduced in the recently issued
‘UK Corporate Governance Code 2024’ for an annual report
on the effectiveness of material controls, from 2026.
• A review of approach to risk appetite as part of our risk
evolution project.
• Further development of the Company’s sustainability
reporting including consideration of the requirements
of the Taskforce on Nature-related Financial Disclosures
(‘TNFD’) whose final framework was published towards
the end of 2023.
• The ongoing development of an Audit and Assurance
policy.
AUDIT COMMITTEE REPORT
Overall, I am satisfied that the activities of the Committee
enable it to gain a good understanding of the key matters
impacting the Company during the year along with oversight
of the governance and operation of its key controls, and
ultimately to draw the conclusions set out in the following
Report.
Kate Ferry
Chair of the Audit Committee
5 March 2024
81Greggs plc Annual Report and Accounts 2023
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Composition
The Audit Committee comprises of the following:
Kate Ferry (Chair)
Mohamed Elsarky
Lynne Weedall
Nigel Mills (from 7 March 2023)
Helena Ganczakowski and Sandra Turner served on the
Committee until 17 May 2023 when they retired from the
Committee and the Board.
It is the practice of the Company for all Independent
Non-Executive Directors to serve as members of the
Audit Committee.
Training is provided for any new members of the Audit
Committee by way of a thorough induction process which
includes access to the external auditor, the Head of Business
Assurance and relevant members of management.
The Committee provides independent and robust challenge
to management and our internal and external auditors,
ensures there are effective and high-quality controls in place
and that appropriate judgements are taken, with a particular
focus on matters that involve either a high degree of
judgement and/or are significant to the Accounts.
The Directors’ biographies on pages 66 and 67 detail the
Committee members’ previous experience and demonstrate
that they have experience individually in a range of
disciplines relevant to Greggs’ business. The Board
considers that Kate Ferry has recent and relevant financial
experience.
Role and responsibilities
The Terms of Reference of the Committee can be accessed
at: https://a.storyblok.com/f/162306/x/3d283017cf/
audit-committee.pdf
The key responsibilities of the Audit Committee are:
• Ensuring that the accounting and financial policies and
practices of the Company are proper and effective;
• Assisting the Board in fulfilling its oversight
responsibilities by monitoring the integrity of the
accounts and information published by the Company
and reviewing and challenging significant financial
judgements contained in them;
• Advising the Board on whether it believes the Annual
Report and Accounts, taken as a whole, is fair, balanced
and understandable and provides the information
necessary for shareholders to assess the Company’s
position and performance, business model and strategy;
• Reviewing the internal financial controls and the Group’s
approach to risk management;
• Overseeing whistle-blowing arrangements;
• Monitoring compliance with the Listing Rules and the
recommendations of the UK Corporate Governance Code;
• Overseeing the Company’s internal auditors and reviewing
the effectiveness and objectivity of the audit process;
• Overseeing the Company’s external auditors, reviewing
their independence and objectivity and monitoring the
effectiveness of the audit process;
• Developing and implementing policy on the external
auditor’s provision of non-audit services; and
• Reporting to the Board on how it has discharged its
responsibilities.
Meetings during the year
The Audit Committee met four times during the year. Details
of Committee members’ attendance are given on page 70 .
All members attended every meeting that they were eligible
to attend. Detailed papers are prepared and circulated in
advance of Committee meetings by both management
(including internal audit) and the external auditor, thereby
allowing informed discussions, challenge and decision
making to take place at meetings.
The Committee normally invites the Company Chair, the
Executive Directors, the Head of Business Assurance and
the external auditor to attend its meetings. Time is set aside
bi-annually for discussion with the external auditor and with
the Head of Business Assurance, in each case in the absence
of all Executive Directors. The Committee also has access to
the Company’s management team and to its auditor and can
seek further professional advice, at the Company’s cost, if
required. The Chair has regular contact with the Chief
Financial Officer, and internal and external auditors, in
addition to scheduled Committee meetings to ensure that
emerging issues are addressed. She also has access to an
audit partner independent of the partner responsible for
the audit.
Financial reporting
In 2023 the Audit Committee reviewed the 2022 Annual
Report, interim results, preliminary results announcement
and reports from the external auditor on the outcome of their
reviews and audits.
During the year, and up to the date of this Report, the
Committee considered key accounting issues and
judgements and related disclosures in the Group’s accounts.
The significant areas of judgement considered by the
Committee in relation to the accounts for the 52 weeks
ended 30 December 2023 are as follows:
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AUDIT COMMITTEE REPORT CONTINUED
Area of focus Action taken
Accounting for leases
Under IFRS 16 lease liabilities, representing the obligation to make lease
payments, are recognised on the balance sheet together with corresponding
right-of-use assets. In the income statement rent costs are replaced by a
straight-line depreciation charge on each right-of-use asset and an interest
charge that reduces over the lease term.
At the end of 2023 the Group has recognised right-of-use assets of £296.6 million
(2022: £281.6 million) and lease liabilities totalling £319.6 million (2022: £301.3
million). Charges to the income statement of £54.5 million (2022: £52.8 million)
in respect of depreciation, £2.5 million (2022:£nil) on respect of impairment and
£9.6 million (2022: £6.8 million) in respect of interest were recognised.
The sensitivities of the assumptions on this amount are set out on page 126 .
The Committee continues to review and monitor any developments in this area to ensure that judgements
made are up to date and remain valid and that the approach adopted is still appropriate to the Group’s
circumstances.
The Committee considers that the judgements made are appropriate to the Group’s particular
circumstances.
Fair, balanced and understandable
The Committee is responsible for advising the Board on whether it believes
the Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable.
The Committee received a report from the Head of Business Assurance, who is not involved in the
preparation of the Annual Report and Accounts and who conducted an independent review of it.
The following factors were considered during the course of this review:
• Ensuring that all the statements are consistent with one another;
• Verifying that figures in the narrative sections are consistent with the relevant financial detail;
• Identifying any duplication of information;
• Confirming that ‘bad news’ is included, as well as ‘good news’; and
• Highlighting any inappropriate use of technical language or jargon.
The Audit Committee considered the feedback from this report alongside its own review of the Annual Report
and Accounts when making its recommendation to the Board regarding fair, balanced and understandable.
Going concern
The accounts continue to be prepared on a going concern basis.
Information provided by the Chief Financial Officer regarding future financial plans, risks and liquidity was
presented to the Committee to enable it to determine whether the going concern basis of accounting
remained appropriate.
The Committee reviewed and challenged the assumptions used and concluded that the Board is able to make
the going concern statement on page 73 of the Directors’ Report.
Viability
The Board is required to consider the period over which it is able to conclude
that the Company will remain viable, having taken into account severe but
plausible risks and risk combinations.
The Committee reviewed the process undertaken by management to support and allow the Directors to
assess the Group’s long-term prospects and make its viability statement. The Committee considered and
provided input into the determination of which of the Group’s principal risks and combinations thereof might
have an impact on the Group’s liquidity and solvency.
The Committee reviewed the results of management’s scenario modelling and the stress testing of these
models. It also reviewed and challenged the assumptions used and concluded that the Board is able to make
the viability statement on page 65 of the Strategic Report.
83Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
The Committee also considered other key accounting issues and related disclosures in the
Group’s accounts as follows:
• Whether the principles and judgements applied when management assess property,
plant and equipment and right-of-use assets for impairment remain appropriate;
• Whether the assumptions made in valuing the defined benefit pension scheme assets
remain appropriate, including consideration of the discount rate, inflation rates and
mortality rates as well as the requirements of IFRIC 14: IAS 19 – The Limit on a Defined
Benefit Asset, Minimum Funding Requirements and their Interaction;
• Whether the treatment and disclosure of material items of income or expense in the year
is appropriate together with the FRC’s guidance on the subject;
• Whether any changes in accounting policy were required following changes in the business
or in legislation;
• Whether the Company’s tax policy remains appropriate;
• The impact of changes in accounting standards and their relevance, if any, to the Company;
• Reports from the Company Secretary and Chief Financial Officer which assess the
Company’s compliance with the Listing Rules.
Sustainability reporting
The Committee plays a key role in the governance of climate-related reporting, including
overseeing the process adopted in relation to identification of the Company’s climate-related
risks and opportunities and the associated reporting of the Company’s Task Force on
Climate-related Financial Disclosures (TCFD) which are on pages 46 to 53 . This approach
builds on the foundations adopted in prior years. The Committee continues to monitor
developments in sustainability reporting and will consider the requirements of the two
new standards issued by the International Sustainability Standards Board once the UK’s
endorsement and adoption of these standards is clear.
The Committee has begun to consider the requirements of the Taskforce on Nature-related
Financial Disclosures (TNFD) whose final framework was published towards the end of 2023.
It plans to build the initial assessment of nature-related risks and opportunities into its
sustainability activities for 2024 and will develop an action plan with the intention of including
a TNFD report in the 2024 Annual Report.
External audit
Assessing external audit effectiveness
The Audit Committee discussed and agreed the scope of the audit with the external auditor
and agreed their fees in respect of the audit.
The Committee reviewed the effectiveness of the external audit in line with the Financial
Reporting Council’s ‘Practice aid for audit committees’ (December 2019). It sought feedback
from senior management, by way of a detailed questionnaire, in respect of the effectiveness
of the audit process.
The Committee also considered the effectiveness of the audit through the reporting from and
communications with the auditor and an assessment of the auditor’s approach to key areas of
judgement and any errors identified during the course of the audit.
The Committee concluded that the audit was effective and that the relationship and
effectiveness of the external auditor be kept under review.
Appointing the auditor and safeguards on non-audit services
The Committee’s policy on auditor appointment is to consider annually whether to conduct
an audit tender for audit quality or independence reasons. During 2020 the Audit Committee
conducted a full tender exercise for the appointment of a new auditor which resulted in the
appointment of RSM UK Audit LLP (‘RSM’) as auditor at the AGM in May 2021.
It is the responsibility of the Committee to monitor the independence and objectivity of the
external auditor (including the impact of any non-audit work undertaken by it) and its suitability
for reappointment.
The Company has a formal policy to ensure that the provision of non-audit services by the
external auditor for non-audit work does not compromise the auditor’s independence or
objectivity. It monitors the level and type of non-audit fees on an annual basis and ensures that
the overall level of non-audit fees remains in line with current ethical guidance governing the
accounting profession.
The Audit Committee favours a presumption that non-audit work will be awarded to a firm
other than the audit firm unless there is a good reason to use the auditor. An annual base plan
for non-audit fees paid to the external auditor is agreed in advance by the Audit Committee.
Expenditure in accordance with this plan can then be committed without further referral to
the Audit Committee. Expenditure that is not included in the agreed plan is subject to strict
authority limits and is reviewed by the Committee.
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AUDIT COMMITTEE REPORT CONTINUED
All use of the external auditor for non-audit work must be reported to and approved by the
Committee. In circumstances where non-audit fees are significant relative to the audit fee
an explanation would be provided in the subsequent Audit Committee Report. In addition,
the Audit Committee ensures that the external auditor has its own policies and is subject
to professional standards designed to safeguard their independence as auditor.
The Audit Committee has reviewed whether, and is satisfied that, the Company’s current
auditor, RSM, continues to be objective and independent of the Company. The Committee has
approved RSM to provide non-audit services during 2023 in respect of the review of turnover
certificates as required by certain shop landlords. Fees of £14,250 were billed during the year
for turnover certificate reviews, which represents 4.8% of the audit fee for the year.
Appointment of auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the
reappointment of RSM UK Audit LLP will be proposed at the forthcoming AGM. The length
of their tenure as external auditor is three years.
Risk management and internal control
Internal Control
Greggs has an internal control environment designed to protect the business from the
material risks which have been identified. Management is responsible for establishing
and maintaining adequate internal controls and the Audit Committee has responsibility
for ensuring the effectiveness of these controls.
Following the publication of the 2024 revision to the UK Corporate Governance Code,
in 2024 the Committee will consider and plan for the actions that will be needed to facilitate
the annual reporting on the effectiveness of material controls, which will be a requirement
from 1 January 2026.
The Committee receives updates from the Business Assurance function on the internal
control environment at every meeting, covering both risk management and internal audit
perspectives. This regular reporting ensures timely review of any key issues. Whilst the
Committee is updated on all internal audit activity, those reports which conclude only limited
assurance are considered in greater detail, with a summary provided of key issues identified
and actions taken in response. This gives Committee members assurance that any control
weaknesses which have been identified are being addressed.
The Committee considers the matters described above to be the main features of the Group’s
internal control and risk management systems in relation to the financial reporting process for
the undertakings included in the consolidation as a whole. The Committee has reviewed the
Company’s internal control environment and is satisfied that procedures are in place to ensure
that assets are well protected, authority levels for expenditure are clear, segregation of duties
exists and performance is regularly monitored. Processes are in place to ensure that key
controls are being operated and compliance with these processes is the subject of inspection
by the Internal Audit team within the Business Assurance function, and subsequent review and
oversight by the Audit Committee.
Whistle-blowing
The Company’s whistle-blowing policy is available to all employees via the intranet and our
new ‘People Hub’, an electronic repository of all relevant colleague information. This gives
information regarding how to raise a concern in strict confidence, and incorporates three
escalation levels. During 2023, new posters were produced summarising the process, and
these have been launched across the business to improve awareness. We have also engaged
with our franchise partners to verify that they have suitable processes in place.
Our Audit Committee Chair is the ultimate contact and resolution point for this process,
and received a small number of contacts during the year. All issues raised were thoroughly
investigated and successfully resolved, with no formal action being taken.
Risk Management Process
The Audit Committee receives an update on risk management at each of its meetings, and
an annual report providing detail on the overall process, and key activities during the year.
This process ensures that the Committee meets its obligation to oversee the effectiveness
of risk management, and allows it to confirm to the Board that arrangements are appropriate.
The risk management process is explained in more detail on pages 59 to 65 .
The Committee has reviewed the risk management process and is satisfied that appropriate
arrangements are in place to ensure that existing risks are properly managed across the
business and that processes are in place to identify and consider any new and emerging risks
in a timely manner.
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Key areas subject to specific review by the Audit Committee include the following:
Area of focus Action taken
Financial reporting All judgemental areas in the accounts are considered by the
Committee, to provide independent challenge to the process.
TCFD The Committee considered and agreed the proposed statement
regarding TCFD requirements.
Cyber risk and
information security
Cyber risk and information security is considered at every Audit
Committee meeting, within the Head of Business Assurance’s activity
update. In particular, there have been regular updates on the
Information Security Management System, the implementation of
which continues to strengthen our cyber resilience. The Committee is
also apprised of future developments including further testing and
simulated attacks.
Risk management The Audit Committee has received updates on the progress with the
continued implementation of our Enterprise Risk Management model,
including process developments and engagement with the business.
Insurance As a key control mitigating several strategic risks, the Committee
received updates on a programme of work undertaken to review the
overall approach to insurance.
New and emerging
risks
New and emerging risks are raised and discussed by members of the
Risk Committee at each of its meetings. Any significant matters are
escalated to the Audit Committee for further discussion.
Review of principal
risks and
uncertainties
The Risk Committee discussed the key strategic risks faced by the
business during 2023 and used this to develop the content of the
statement of principal risks and uncertainties. This in turn was
considered by the Audit Committee after the year-end, and approved
for inclusion in this Report, on pages 59 to 65 .
Viability and going
concern status
As part of the Annual Report review, the Committee has considered
and agreed the viability statement and the various scenarios modelled
within it as part of the assessment.
The Company’s adoption of a going concern basis for accounts
preparation was reviewed at the mid-year, as well as during the
consideration of the Annual Report.
Internal audit
function
The Committee has reviewed the work and output of the internal audit
function, and concluded as to its effectiveness throughout the year.
Internal audit
The work of the internal audit function is set out in more detail within the risk management
section on pages 59 to 65 of this Annual Report. The team is led by the Head of Business
Assurance, supported by 28 auditors, along with two colleagues managing Information
Security and Data Protection. The majority of the audit resource is dedicated to the retail
estate, including our franchise shops, providing the Audit Committee with assurance that the
required controls for safe operation within the shops are in place and operating effectively.
The Business Assurance team presents an annual plan to the Audit Committee for approval,
setting out how the resource will be allocated across the business. Progress against this plan
is monitored at subsequent meetings. The effectiveness of the team and its level of resource
are reviewed by the Committee annually, including a consideration of outputs, and customer
feedback received.
Committee effectiveness
As noted in the Governance Report on page 69 there was an externally-facilitated evaluation
of the Board and its committees during 2021. The evaluation for 2023 was therefore conducted
using an online tool which generated a report specifically relating to the operation of the Audit
Committee. The Committee has considered the results of this evaluation and concluded that
the Committee operates effectively and that the Board takes assurance from the quality of
its work.
Kate Ferry
Chair of the Audit Committee
5 March 2024
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DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION REPORT
Dear Shareholder
On behalf of the Remuneration Committee (the ‘Committee’),
I am pleased to present our Directors’ Remuneration Report
for 2023.
The Committee continues to have a transparent approach
to remuneration at Greggs. A key focus continues to be
workforce fairness and the pay arrangements and support
provided to our colleagues across the business. Our people
are at the heart of our business and what makes our business
successful. Supporting our colleagues and protecting our
culture, alongside our shareholders’ and wider stakeholders’
interests, remains our priority. Our Report aims to be clear,
simple and easy-to-read, providing explanations and
rationale for our decision-making in the context of Company
performance, the longer-term Company strategy (including
environmental, social and governance (‘ESG’) priorities) and
pay arrangements for the wider workforce.
The Report is made up of three key sections:
• My annual Chair’s letter.
• Our Directors’ remuneration policy, which was formally
approved at our AGM on 17 May 2023 and operates for the
three years commencing with the 2023 financial year.
• Our Annual Remuneration Report, split into sections that
set out:
A. How our policy links to Company strategy and reward
across the wider workforce;
B. Remuneration Committee activity for the 52 weeks
ended 30 December 2023;
C. How Directors’ remuneration will be implemented in
2024 in line with our current remuneration policy; and
D. How our remuneration policy was implemented in 2023.
This is an audited section of the Report outlining the
remuneration of the Executive and Non-Executive
Directors during the 52 weeks ended 30 December 2023.
The Annual Remuneration Report, together with this Chair’s
letter, will be subject to an advisory shareholder vote at the
2024 AGM.
Remuneration policy
Our remuneration policy consists of the following elements:
• Fixed pay – base salary, pension and benefits; and
• Variable pay – annual bonus (paid in both cash and deferred
shares) and performance share plan (‘PSP’) measuring
long-term performance and delivered in shares.
Consideration of the wider workforce
Our continued financial success is thanks to our amazing
colleagues. With this in mind, the Committee monitors and
reviews the effectiveness of the Directors’ remuneration
policy and its impact on and alignment with the remuneration
policies in the wider workforce. To support decisions on
Executive Directors’ pay, the Committee is provided with
information detailing the pay and benefits of the wider
workforce which gives additional context for the Committee
to make informed decisions. We have a number of sessions
planned through 2024 to engage with colleagues on
remuneration at Greggs with the first taking place in early
2024. The key topics we will be discussing are the work of the
Committee and our current remuneration policy as well as
how reward is structured across the business, the link to
reward and Greggs’ sustainability journey, and ensuring
reward across our wider workforce continues to support and
complement the Greggs culture. As well as this, members of
the Committee have engaged with colleagues through our
various forums and listening groups throughout 2023 to
continue to understand the colleague experience at Greggs.
The Committee acknowledges that 2023 continued to
be a challenging year for many of our colleagues and were
cognisant of this when reviewing the approach taken with
the wider workforce and when considering the approach
to salary for the Executive Directors for the year ahead.
For 2024 we have once again implemented a tiered pay
award providing a greater percentage increase to support
our colleagues who have less disposable income. We
implemented a base pay award of 8% across our wider
workforce, with an additional 1.6% (9.6% in total) for our
hourly-paid Retail colleagues. On this basis, over 97% of our
workforce received a pay increase of 8% or more and 80%
received 9.6% or more. For our graded management teams
we implemented a tiered pay award.
Following feedback from our reward consultation process
in 2023 with our teams, we are delighted that our colleagues
have benefited from a significant enhancement to our family
leave policies in 2023. From January 2024 we have increased
the pension provision for our wider workforce, allowing our
colleagues to increase their pension contributions up to 6%
with matched contributions. In order to further encourage
colleague share ownership in the business we are also
reducing the eligibility criteria to three months’ service for all
colleagues to participate in our all-colleague share schemes.
One of the unique aspects of Greggs’ remuneration approach
continues to be profit share – with 10% of all our profits being
shared with eligible colleagues. The profit-share payment
this year will see over 25,400 colleagues benefitting from
this additional payment that will be made in March 2024.
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Business performance in 2023 and incentive outcomes
As outlined in the Chair’s Statement and Chief Executive’s
Report, despite the ongoing pressure caused by inflation and
the resulting cost-of-living crisis, the resilience of the Greggs
brand and the strength of our underlying business have
resulted in a record year for Greggs. We are now two years
into our ambitious five-year plan to double sales and our
strategy is working, with like-for-like sales up 13.7% on 2022.
We have had another year of rapid growth and our teams
have risen to the challenges faced and stepped up to keep
pace with increased customer demand. Despite ongoing
pressures we have kept providing the great value and friendly
service that our customers love us for.
During the year the Committee considered the materiality of
historical insurance claims related to business interruption
in 2020, as outlined in the Financial Review. A number of
options were considered but a decision was ultimately made
not to progress any remuneration actions in relation to this
claim, demonstrating continued restraint in the approach to
remuneration.
The Committee also reconsidered the question of whether
there was any potential windfall gain associated with the PSP
award granted in October 2020, which vested in October
2023. Our initial view in relation to this matter – that we were
satisfied that no windfall gain had been realised for this
award – was set out in detail in last year’s Remuneration
Report. In further considering this issue ahead of the vesting
date, we came to the same conclusion, noting (among other
things) the link between the vesting level for this award (75%)
and the strong level of performance over the performance
period, and the fact that the award size had been scaled back
at the time of grant in 2020. Finally, although the share price
at the time of vesting was notably higher than at the time of
grant, this was not an automatic one-way bounce-back from
an artificially low grant price but a fair reflection of business
progress over a turbulent period. In line with the Directors’
remuneration policy, the vested shares must be held for a
minimum period of two years.
Bonus 2023
As disclosed last year, the annual bonus scheme for 2023
was set up with performance targets based on profit (50%),
sales (20%) and strategic objectives (30%). We set target
ranges which were designed to ensure that bonus payments
would only be made for appropriately stretching levels of
performance. This included profit targets designed to
incentivise growth, sales targets aimed at like-for-like
growth and separate objectives linked to driving forward our
strategic growth plans in the areas of evening sales and
digital and achieving our ESG targets in the areas of food
redistribution and recycling.
As noted above Greggs performed well in 2023 producing a
record performance. Despite the ongoing pressure caused by
inflation, our teams rose to the challenges they faced. Whether
in our shops, our manufacturing sites, our distribution network
or in head office our teams stepped up to make sure that we
kept pace with the increased customer demand. Our teams
delivered positive like-for-like sales growth and, as a
consequence of this financial performance over the year,
the profit (50%) element of the bonus reached 45.9% payout
and sales (20%) reached the maximum 20% payout.
The strategic objectives comprised three separate
elements, with 10% based on business efficiency/cost
savings, 5% based on evening sales, 5% on increasing the
percentage of transactions on the Greggs App and 10% on
food waste/redistribution targets.
There was a strong focus on cost control during the year
resulting in the business efficiency/cost saving element
paying out in full at 10%.
5% of the bonus was focused on increasing evening sales
and a stretching target was applied to this area. The teams
worked incredibly hard to manage our growth in the evening
and there was significant focus across our whole retail
estate to support and engage our teams in this initiative and
drive customer numbers. Throughout the year, evening was
the fastest growing day part, with sales increasing 45%
versus 2022. Despite this great progress, this area of the
bonus only achieved 1.4% payout, reflecting the very
stretching targets that were set at the start of the year. This
continues to be a key focus area for 2024.
5% of the bonus was focused on increasing the percentage
of average transactions involving a Greggs App reward scan.
We have continued to make excellent progress in this area
with use of the App doubling in 2023, leading to a full payout
for this element of the bonus. We are delighted to have
achieved full payout in this area where we have performed
strongly.
The final 10% of the bonus was focused on ESG metrics and
was split equally between increasing food redistribution and
increasing recycling. These were challenging targets and
our teams across the business worked hard to meet them.
There was an increase in the proportion of unsold food
redistributed compared with 2022, but the outcome for the
year was marginally below the threshold target set for this
element of the bonus, resulting in no payout. With regards to
the recycling measure, the Committee set specific targets at
the start of the year but needed to change the basis of the
approach to a more qualitative assessment, due to an issue
with the external measurement basis for the original targets,
which was outside the Committee’s control. In considering
recycling over the year, the Committee noted that all teams
made great progress, with a significant number of initiatives
implemented across our whole business – Retail, Supply and
Offices. These initiatives included recycling being a part of
every shop performance scorecard and ensuring there was
focus on recycling across the whole business and a
behavioural shift by teams. On this basis and in order to
acknowledge the significant work undertaken by all
colleagues and the progress made in this area the Committee
determined an appropriate level of payout would be 50% for
this element of the bonus. This results in 2.5% of the total
bonus being attributed to the work undertaken to improve
focus across our whole business on recycling.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
The overall performance resulted in a bonus payout of 84.8%
of the maximum and the Committee is satisfied that the
overall bonus outcome aligns well with the strong business
performance in 2023. The Committee carefully reviewed
management’s performance against these targets, taking
the full business context and stakeholder experience into
account and determined that this level of payout was
appropriate with no need to apply discretion. For both the
Chief Executive and the Chief Financial Officer, this equated
to a payment of 106% of basic salary (out of a maximum of
125%) for the year. The element of the bonus earned above
50% of the maximum will be paid in shares and will be subject
to a two-year holding period.
PSP vesting in 2023
The three-year performance period for the PSP awards
made in April 2021 and due to vest in April 2024 ended on
30 December 2023.
50% of these awards were based on EPS in FY 2023 being
between 77.2 and 105.3 pence per share, with the other 50%
based on the FY 2023 ROCE being between 14.8% and 19.5%.
In the event, FY 2023 EPS was 125.0 pence per share and
FY2023 ROCE was 21.1%. This meant that both EPS and
ROCE performance conditions vested in full delivering 100%
vesting for the total award.
The Committee has reviewed this outcome in the context
of wider business performance and stakeholder experience
over the performance period, and is very comfortable that
vesting is justified at this level with no need to apply
discretion to adjust the outcome.
Approach for 2024
As we move ahead with our strong growth plans we continue
to focus on the fundamental strategic pillars of our business
model and the four key growth drivers of our plan to reach
our potential in the years ahead, underpinned by The Greggs
Pledge. Our remuneration approach continues to align with
this strategy. While continuing to act with restraint in
remuneration matters, we believe we have a policy and
incentive plans that strike the right balance between
achievability and stretch, driving the right decisions for the
business, supporting the wider workforce and shareholders,
and at the same time motivating and enabling the retention
and recruitment of senior talent.
Salaries and fees
We have once again reviewed carefully the approach taken
with the wider workforce when considering the approach
to salary for the Executive Directors for the year ahead.
As noted above, the 2024 pay award agreed for our wider
workforce consisted of a base pay award of 8%, with an
additional 1.6% (9.6% in total) for our hourly-paid Retail
colleagues – Retail Supervisors, Retail Senior Team Members
and Retail Team Members. On this basis, over 97% of our
workforce received a pay increase of 8% or more and 80%
received 9.6% or more. This pay increase was implemented
from January 2024 for all our colleagues.
For our graded management population, we again
implemented a tiered pay award. Our management
colleagues received a base increase of 7% with our senior
managers’ pay awards ranging between 5.5% and 6%.
Subsequently the Committee reviewed the pay award of both
the Executive Directors and Operating Board and agreed that
the awards should again be proportionally lower than the
general increases across the wider workforce.
With effect from 1 January 2024, the Committee agreed
a salary increase of 4.5% for the Chief Executive and the
Chief Financial Officer, with the same increase being agreed
for the Operating Board. A consistent approach was also
taken in relation to the fees for the Board Chair and other
Non-Executive Directors’ fees, which were also increased
by 4.5%.
Annual bonus
The maximum bonus opportunity for the Chief Executive
and the Chief Financial Officer will remain at 125% of salary.
The Committee believes that the current performance
measures – profit (50%), sales (20%) and strategic objectives
(30%) remain appropriate and no changes are proposed to
these weightings. Profit and sales are critically important to
Greggs, and are measures which are closely followed by the
market as indicators of the financial health of the business.
The strategic objectives will comprise of separate elements
with 10% based on business efficiency/cost savings,
5% based on evening sales, 5% based on delivery sales,
5% based on our digital strategy and 5% based on food
redistribution targets. The use of these measures reflects
our desire to incentivise and reward progress on achieving
our strategic goals and meeting the commitments set out
in The Greggs Pledge.
Targets for these measures have been set in line with
the financial plan for the business for the year and the
rolling strategic plan and are considered to be stretching.
Due to commercial sensitivities they are not disclosed within
this Report, but will be disclosed retrospectively in next
year’s Report.
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PSP
For the FY2024 PSP award, as in 2023, the Chief Executive
and Chief Financial Officer will receive an award at a level of
150% of salary.
For the awards in FY2024 the Committee has considered the
performance conditions and has agreed three performance
measures. We will keep both EPS and ROCE, equally split at
45% of the award. These measures have been used for a
number of years and are well understood by participants,
by investors and by the wider market as good indicators of
long-term financial performance. ROCE will also be key as we
seek to secure the benefits of the investments being made in
the shop estate and in the Supply Chain. For FY2024, we will
also be continuing with an ESG metric with a weighting of
10% of the award. This will be a Scope 3 metric based on
using our commercial leverage to engage with our Supply
Chain to drive measurement and public reporting of their
Scope 1, 2 and 3 carbon footprint and to declare a public
commitment to achieving net zero no later than 2050 (the UK
Government legislative net zero date). This metric reflects
the importance Greggs is placing on the journey of both itself
and suppliers to carbon neutrality.
We have set appropriately stretching performance targets
for each measure reflecting the strategic plan and business
outlook over the performance period. Full details of the
targets are set out later in this Report.
Pensions
As noted above, having listened to our colleagues, we have
increased the matched pension contribution for our wider
workforce from 4% of pay to 6% of pay as of January 2024.
This ensures we continue to support our colleagues in saving
for their future as any contribution they wish to make up to a
maximum of 6% will now be matched by Greggs. All our
Executive Directors have had their pension contributions
aligned to the majority of the workforce (previously 4% of
salary) since 1 January 2023. As of January 2024 this
alignment will continue and the pension contribution for our
Executive Directors will be increased to 6% of salary.
Shareholder engagement
We continue to welcome feedback from our shareholders
as their views inform our thinking on remuneration matters,
in particular when evaluating and setting the remuneration
policy and its implementation. The Committee is committed
to continue consulting with key shareholders where
appropriate.
AGM
We trust that you will find this Report transparent, clear
and informative. The Committee has remained focused on
ensuring that Executive remuneration is closely aligned to
the delivery of Greggs’ business strategy whilst continuing
to take account of the stakeholder experience, best practice
and the wider workforce.
At the AGM this year we will be providing shareholders
with the usual advisory vote on the Annual Report on
Remuneration. I look forward to receiving your support.
If you would like to contact me directly to discuss any
aspect of this Report then please email me at
investorrelations@greggs.co.uk.
Lynne Weedall
Chair of the Remuneration Committee
5 March 2024
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Directors’ remuneration policy
This section of our Report describes our Directors’ remuneration policy, which applies to
all Executive and Non-Executive Directors. It explains the purpose and the operation of each
element of the remuneration package and explains how Executive Directors are incentivised
to achieve sustainable long-term growth and value to best serve the interests of the Company,
its shareholders, its colleagues and other stakeholders. Payments to Directors (including
payments for loss of office) can only be made if they are consistent with the terms of the
approved policy.
The policy has been prepared in line with the relevant legislation for UK companies and was
approved by way of a binding vote at the AGM on 17 May 2023 and was applicable as of this date.
Our current intention is that the policy will remain in place for three years from the date it was
approved.
The policy for the remuneration of the Executive and Non-Executive Directors is set out in the
tables below.
Executive Directors
Element Purpose and strategy Operation Maximum opportunity
Base salary To attract and retain high-calibre
individuals in order to promote
the long-term success of the
business.
Normally reviewed and set annually in January.
Benchmarked periodically by the Committee against the remuneration levels for executives
in similar roles in companies of a comparable size. Individual performance and contribution
are recognised in setting salary levels.
Salaries are paid monthly in cash.
No maximum limit is prescribed.
Key reference points for salary increases
are market and economic conditions and,
in line with our values, the approach to
colleague pay throughout the
organisation.
Benefits To support a competitive
remuneration package in
the marketplace.
Benefits include provision of a company car (or cash in lieu), private medical health care,
life assurance and permanent health insurance.
No maximum limit is prescribed,
particularly as the cost of providing
insured benefits fluctuates over time.
However, the Committee monitors on an
annual basis the overall cost of the benefit
provision.
Pension To ensure that pension
contributions are aligned to
the rate applying to the majority
of the workforce over time.
Executive Directors can elect to either:
• participate in the Company defined contribution pension scheme (up to a cap).
Above the cap Executive Directors receive a salary supplement; or
• take cash in lieu of this contribution paid as a supplement to their salary on a monthly basis.
The Executive Directors are able to make this choice on an annual basis.
The pension contributions rate of all
Executive Directors is aligned to the rate
applying to the majority of the workforce.
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Element Purpose and strategy Operation Maximum opportunity
Annual bonus
(including profit
share)
To incentivise achievement of
annual targets and objectives
consistent with the short to
medium-term strategic needs
of the business, so as to
encourage sustainable
growth in the Company’s
operating profits.
The bonus will be based on a mix of business key performance indicators (KPIs),
with a majority based on financial measures.
Targets for each metric are set in advance and in line with business planning objectives set
by the Committee.
Each Executive Director is entitled to participate in the Company’s profit-sharing scheme
available to all colleagues. The value of this is then deducted from their annual bonus and
is subject to the individual cap.
The Committee will use appropriate underpins for any non-profit based element of the annual
bonus such that payment under these elements may be scaled back (potentially to zero), at the
discretion of the Committee, if the operating profit performance for the year is judged to be
running significantly below that required for the achievement of the long-term strategy.
The Committee will be able to adjust the formula-driven outcome from any bonus plan if, in
the judgement of the Committee, this does not reflect broader Company performance or the
shareholder experience, or the payment level is otherwise inappropriate.
Any bonus paid in excess of 50% of the maximum will be payable in shares, which (after any
sales to pay tax and other statutory deductions) must be held in the Greggs Employee Benefit
Trust for two years after receipt.
The dividends payable on deferred bonus shares are paid to the individual as they fall due.
Recovery and withholding provisions allow the Company to recoup annual bonus payments
within three years in the event of misstatement of performance, error, misconduct,
reputational damage or corporate failure where this has led to an overpayment in the view
of the Committee. There is a flexible mechanism which allows the Company to withhold
outstanding deferred or future remuneration or recover the overpayment direct from the
individual concerned.
Capped at 150% of base salary for all
Executive Directors.
On target performance delivers no more
than 50% of the maximum.
No more than 25% of the bonus
opportunity is payable under each
element for threshold performance.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Element Purpose and strategy Operation Maximum opportunity
Performance
Share Plan (‘PSP’)
To incentivise long-term value
creation, retention of our talent
and ensure alignment of
Executive Directors’ and
shareholders’ interests.
Awards are normally granted under the PSP annually at the discretion of the Committee.
Performance conditions will be based on long-term KPIs, with a majority weighting on
financial measures with targets being set for each metric which reflect the strategic plan
and business outlook over the respective performance period.
Performance will be measured over a three-year period with an additional mandatory
holding period of two years for the vested shares (net of tax and other deductions).
A PSP award holder may be entitled to a dividend equivalent payment in respect of any
vested shares.
The Committee will be able to adjust the formula-driven outcome from the PSP if, in the
judgement of the Committee, this does not reflect broader Company performance or the
shareholder experience, or the vesting level is otherwise inappropriate.
Recovery and withholding provisions allow the Company to recoup vested PSP awards within
three years in the event of misstatement of performance, error, misconduct, reputational
damage or corporate failure where this has led to an overpayment in the view of the
Committee. There is a flexible mechanism which allows the Company to withhold outstanding
deferred or future remuneration, or recover the overpayment directly from the individual
concerned.
200% of base salary for the Chief
Executive and 175% of base salary for
other Executive Directors (200% of base
salary in exceptional circumstances).
Threshold vesting at 25% of the
maximum.
All colleague
Share Schemes
(SAYE and SIP)
To encourage colleagues at
all levels within the Company
to understand better and so
participate in the growth in
value of the Company.
No performance conditions have been attached to awards granted pursuant to the
Company’s SAYE and SIP schemes, which are available for all eligible colleagues.
Executive Directors may participate
alongside eligible colleagues to the extent
permitted by HMRC limits.
Share retention
guidelines
To further align the interests
of Executive Directors to those
of shareholders.
Executive Directors are required to build up a shareholding of 200% of base salary.
Where an Executive Director has not reached the required level, 50% of the shares
vesting from incentive schemes must be held until this requirement has been met.
This is achieved through vested awards granted via the PSP and deferred bonus shares.
For all Executive Directors there is a two-year post-employment holding requirement at
the lower of the level of the shareholding guideline immediately prior to departure or the
actual shareholding at departure.
n/a
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Non-Executive Directors
Element Purpose and strategy Operation Maximum opportunity
Non-Executive
Chair and
Directors’ fees
To attract and retain high-quality
and experienced Non-Executive
Chair and Directors.
The Chair is paid an all-encompassing fee.
Non-Executive Directors are paid a basic fee and the Chairs of the Main Board
Committees, the Senior Independent Director and the Non-Executive Director
with responsibility for colleague engagement are paid an additional fee to reflect
their additional responsibilities.
These fees are usually reviewed and set annually. Additional fees may be paid
where there is a material increase in the time commitments or responsibilities
required of Non-Executive Directors or following a review of market rates.
Non-Executive Directors are not eligible for pension scheme membership,
bonus or incentive arrangements.
They are entitled to reimbursement of reasonable business expenses and tax
thereon. They may also receive limited travel or accommodation-related benefits
in connection with their role as a Director.
There is no prescribed maximum.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Choice of performance measures and policy discretion
The remuneration policy provides the Remuneration Committee with the flexibility to choose
appropriate performance conditions for the annual bonus scheme and for PSP awards,
subject to the constraints set out in the table above. The choice of metrics will depend upon
the strategic focus for the Company at the time decisions around the awards are taken.
The specific measures and the targets used to assess performance will be disclosed in the
Directors’ Remuneration Report on an annual basis. For further information, please see the
section ‘How our remuneration links to strategy and reward across the wider workforce’ on
pages 97 and 98 .
The Committee will operate incentive plans in accordance with their respective rules,
the Listing Rules and HMRC limits where relevant. The Committee, consistent with
market practice, retains discretion over a number of areas relating to the operation and
administration of certain plan rules. These include (but are not limited to) the following:
• Who participates;
• The timing of the grant of award and/or payment;
• The size of an award (up to plan/policy limits) and/or a payment;
• Discretion relating to the measurement of performance in the event of a change of control
or reconstruction;
• Determination of a good leaver (in addition to any specified categories) for incentive plan
purposes and the treatment of leavers; and
• Adjustments required in certain circumstances (i.e. rights issues, corporate restructuring
and special dividends), and the ability to adjust, but not waive, existing performance
conditions for exceptional events so that they can still fulfil their original purpose.
Difference in remuneration policy across the Group and consideration
of employment conditions elsewhere in the Group
The remuneration policy for the Executive Directors is designed having regard to the policy
for colleagues across the business as a whole and wider workforce remuneration and related
policies. Further information is provided in the section ‘How our remuneration links to strategy
and reward across the wider workforce’ on pages 97 and 98 .
Statement of consideration of shareholder views
When setting the remuneration policy and determining its implementation, the Committee
takes into account the views of shareholders, their representative bodies and other interested
parties such as proxy advisers. The Committee regularly consults major shareholders on
proposed changes to the policy, and did so during 2022 in respect of the new policy. The
Committee considered comments received from shareholders before finalising the terms
of the policy.
Legacy arrangements
For the avoidance of doubt, in approving this policy, authority is given to the Company
to honour any commitments entered into with current or former Directors (such as the
payment of a pension or the unwinding of legacy share schemes) that have been disclosed
to shareholders in previous remuneration reports. Details of any of these payments to former
Directors will be set out in the Annual Report on Remuneration as they arise.
Policy on recruitment remuneration
The Committee will set a new Executive Director’s remuneration package in line with the
Company’s approved policy at the time of appointment. In arriving at a total package and in
considering the quantum for each element of that package, the Committee will take into
account the skills and experience of the candidate, the market rate for a candidate of that
experience as well as the importance of securing the best available candidate.
Annual bonus and PSP awards will not exceed the policy maxima (not including any
arrangements to replace forfeited pay). Participation in the annual bonus plan will normally
be pro-rated for the year of joining. The Committee may make one-off additional cash and/or
share-based awards as it deems appropriate, and if the circumstances so demand, to take
account of pay forfeited by an Executive Director on leaving a previous employer. Awards to
replace pay forfeited would, where possible, reflect the nature of awards forfeited in terms
of delivery mechanism (cash or shares), time horizons, attributed expected value and
performance conditions. Other payments may be made in relation to relocation expenses and
other incidental expenses as appropriate. Any buyout awards would be made under existing
arrangements where possible or as permitted under the Listing Rules.
In the case of an internal appointment, any variable pay element awarded in respect of
the prior role would be allowed to pay out according to its terms and any other ongoing
remuneration obligations existing prior to appointment would continue.
In line with our remuneration policy, all new Executive Directors will have their pension
contribution aligned to the rate applying to the majority of the workforce.
For the appointment of a new Chair or Non-Executive Director, the fee arrangement would be
set in accordance with the approved remuneration policy at that time.
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Service contracts and policy on cessation
Executive Directors’ service contracts contain the following remuneration-related aspects:
Provision Detailed terms
Remuneration • Salary, pension and benefits;
• Company car or cash allowance;
• Private medical health care for the Director;
• Permanent health insurance;
• Participation in annual bonus and profit share (subject to scheme
rules);
• Participation in long-term incentive schemes or similar
arrangements (subject to scheme rules); and
• Life assurance.
Notice period • The Chief Executive’s service contract is terminable on 12 months’
notice served by either the Company or the Director;
• The Chief Financial Officer’s service contract is terminable on
12 months’ notice served by the Company or by six months’ notice
served by the Director; and
• Any future Executive Directors’ service contracts will be terminable
on up to 12 months’ notice served by either party.
Termination
payment
• Payment in lieu of notice equal to any unexpired notice of
termination given by either party; and
• Payment in lieu shall not include:
– Any bonus payment;
– Any payment in respect of benefits which the Director would
have been entitled to receive; and
– Any payment in respect of any holiday entitlement that would
have accrued during the period for which the payment in lieu
is made.
Details of the circumstances in which the Committee has the ability
to exercise discretion with regards to termination payments are set
out below.
Under their service contracts, if notice is served the Executive Directors are entitled to salary,
pension contributions and benefits for their notice period save where a payment in lieu is to
be made. The Company would seek to ensure that any payment is mitigated by use of phased
payments and offset against earnings elsewhere in the event that an Executive Director finds
alternative employment during their notice period. There are no contractual provisions in
force other than those set out above that impact any termination payment.
Areas where the Committee can exercise discretion with regards to termination payments
are set out below:
• Any right to annual bonus in the year of departure would lapse unless the individual is
leaving in good-leaver circumstances, in which case a bonus may be payable pro-rated
for that part of the year worked;
• Deferred bonus shares must normally be retained in trust until the end of their two-year
holding period, but may be released early in exceptional circumstances, such as ill-health;
• Any unvested awards held under the PSP will lapse at cessation, unless the individual is
leaving in good-leaver circumstances (defined under the plan as death, injury, ill-health,
disability, redundancy, retirement, their office or employment being with either a Company
which ceases to be a Group member or relating to a business or part of a business which is
transferred to a person who is not a Group member, a change of control or any other reason
the Committee so decides). In these circumstances, unvested awards will normally vest at
the normal vesting date (other than on death or where the Committee decides they should
vest at cessation) subject to performance conditions being met and scaling back in respect
of actual service as a proportion of the total vesting period (unless the Committee decides
that scaling back is inappropriate). Vested awards will normally be subject to the mandatory
two-year holding period although the Committee will have discretion to waive this in
exceptional circumstances; and
• The Committee may agree to payment of disbursements such as legal costs and
outplacement services if appropriate and depending on the circumstances of cessation.
The table below sets out the details of the Executive Directors’ service contracts:
Director Date of contract
Roisin Currie 1 February 2022
Richard Hutton 7 April 2006
The service contracts are available for inspection during normal business hours at the
Company’s registered office, and are available for inspection at the AGM.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Expected value of the proposed annual remuneration package
for Executive Directors
The following charts indicate the level of remuneration payable to Executive Directors in 2024
based on policy at minimum remuneration, remuneration in line with ‘on target’ Company
performance, and the maximum remuneration available.
Chief Executive – Roisin Currie
£3,000,000
PSP
£2,000,000
£2,500,000
£1,500,000
£1,000,000
£500,000
£0
Bonus
Minimum
100%
£714,908
£1,611,518
£2,508,128
£2,997,188
44% 29% 24%
25%
32% 27%
31%
39%
49%
On target Stretch 50%
share price
appreciation
Fixed
remuneration
Minimum On target Stretch
50% share price
appreciation
Fixed remuneration:
– Salary £652,080 £652,080 £652,080 £652,080
– Pension £39,125 £39,125 £39,125 £39,125
– Benefits £23,703 £23,703 £23,703 £23,703
Bonus – £407,550 £815,100 £815,100
Performance Share Plan – £489,060 £978,120 £1,467,180
Total £714,908 £1,611,518 £2,508,128 £2,997,188
Assumptions used in the charts:
• Base salary levels as at 1 January 2024.
• Pension at the wider workforce rate (currently 6%).
• The value of taxable benefits is based on the cost of supplying the benefits at the
agreed level.
Chief Financial Officer – Richard Hutton
£2,000,000
PSP
£1,500,000
£1,000,000
£500,000
£0
Bonus
Minimum
100%
£465,391
£1,053,119
£1,640,847
£1,961,425
44% 28% 23%
25%
33% 27%
31%
39%
49%
On target Stretch 50%
share price
appreciation
Fixed
remuneration
Minimum On target Stretch
50% share price
appreciation
Fixed remuneration:
– Salary £427,438 £427,438 £427,438 £427,438
– Pension £25,646 £25,646 £25,646 £25,646
– Benefits £12,307 £12,307 £12,307 £12,307
Bonus – £267,149 £534,298 £534,298
Performance Share Plan – £320,579 £641,158 £961,736
Total £465,391 £1,053,119 £1,640,847 £1,961,425
Bonus
• Minimum remuneration – assumes no award is earned under the annual bonus plan.
• On target remuneration – the annual bonus plan assumes the target level is reached for
each of the elements, resulting in a payout of 50% of the maximum.
• Stretch remuneration – assumes satisfaction of all performance conditions for all elements
under the annual bonus plan and therefore full payout.
PSP element is calculated as award percentage of base salary multiplied by the relevant
vesting percentage. Share price movement and dividend accrual have been excluded, other
than in the 50% share price appreciation model.
• Minimum remuneration – assumes no vesting is achieved under the PSP.
• On target remuneration – assumes 50% vesting is achieved.
• Stretch remuneration – assumes 100% vesting is achieved.
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Terms of appointment of Non-Executive Directors
Non-Executive Directors are appointed subject to the Company’s articles of association,
retiring and seeking election at the first AGM after appointment.
Thereafter, every Director will be subject to annual re-election by shareholders. The
Nominations Committee advises the Board as to whether Directors should be nominated for
re-election. Non-Executive Directors are not entitled to compensation for early termination
of their appointments prior to the date on which they would next be due to offer themselves
for election or re-election, or if not reappointed at such time.
The letters of appointment for the Non-Executive Directors are available for inspection during
normal business hours at the Company’s registered office, and are available for inspection at
the AGM.
The following table shows the effective date of appointment for each Non-Executive Director:
Non-Executive Director Original date of appointment
Matt Davies 2 August 2022
Kate Ferry 1 June 2019
Mohamed Elsarky 21 June 2021
Lynne Weedall 17 May 2022
Nigel Mills 7 March 2023
Current Non-Executive Directors are appointed on an understanding that the appointment will
last for at least six years, but without any commitment by either party.
All new Non-Executive Directors are appointed for an initial term of three years unless
terminated earlier by either party giving to the other party three months’ written notice.
A. How our remuneration links to strategy and reward across the wider workforce
Link to strategy
Growth drivers Strategic pillars and
key drivers of growth
The Greggs Pledge
Remuneration at Greggs is
intended to incentivise
sustainable and profitable
business growth. This is
reflected in key metrics in
the variable pay incentive
plans including operating
profit, like-for-like sales,
cost savings, EPS and
ROCE.
Delivery against the four
strategic pillars – ‘Great
tasting, freshly prepared
food’, ‘Best customer
experience’, ‘Competitive
Supply Chain’ and
‘First-class support teams’
– is incentivised as
appropriate by strategic
metrics in the annual
bonus scheme, for
example, evening sales,
delivery and digital growth
targets.
Our commitment to deliver
these goals is supported
with the inclusion of ESG
targets in the incentive
schemes, such as food
redistribution and relevant
carbon reduction targets.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Reward across the wider workforce
The remuneration policy for the Executive Directors is designed having regard to the
policy for colleagues across the Group as a whole and wider workforce remuneration and
related policies. There are differences in salary levels and in the levels of potential reward
depending upon seniority and responsibility, although a key reference point for Executive
Director salary increases is the average base pay increase across the general workforce.
For FY2024, we have implemented a tiered pay award such that smaller salary increases
have been agreed for the more senior people within the organisation.
We share 10% of our profits annually with our colleagues across the business, and
everyone is eligible to participate in this profit-sharing scheme after six months’ service.
Share incentive schemes and bonus participation extends below Board level, with a
separate share option scheme in place for senior management colleagues and a bonus
scheme for graded management. Both the share option and management bonus
schemes are aligned to those of the Executive Directors and are subject to the same
performance targets and measures. A higher proportion of the Executive Directors’
remuneration package is delivered through performance-related incentive schemes,
much of which is in share-based form, which provides a good link to long-term Company
performance and the shareholder experience.
All colleagues with three months’ service or more may participate in the Sharesave
scheme (where colleagues can save to purchase shares at the end of a three-year period
at a 20% discount to the price at the date of grant) and in the Share Incentive Plan, (‘SIP’),
(where colleagues can purchase shares from pre-tax salary subject to HMRC limits).
These schemes are generally offered annually.
The pension contributions rate for our Executive Directors is aligned to the contribution
rate for the majority of our workforce which has been increased from 4% to 6% as of
January 2024.
Compliance with the UK Corporate Governance Code
The Directors’ remuneration policy is fully compliant with the relevant factors set out in
the UK Corporate Governance Code:
Clarity We are open and transparent in our approach to remuneration
taking into account the experience of our colleagues, shareholders
and stakeholders. We regularly engage with stakeholders on
remuneration matters.
Simplicity Our remuneration policy is simple and consistent in its approach.
Senior management share option and management bonus
schemes are aligned to those of the Executive Directors and are
subject to the same performance criteria.
Predictability Our remuneration policy clearly outlines the details of maximum
opportunity levels for each component of pay. Incentive levels vary
depending on the level of performance against specific metrics.
The typical award levels and potential pay-outs are disclosed in
the remuneration policy and it is demonstrated in each year’s
Remuneration Report how outcomes are aligned with performance
and strategy.
Proportionality,
risk and
alignment to
culture
Pay outcomes are dependent upon performance linked to our
business strategy and growth plans, as well as taking into account
our wider workforce remuneration and specific Greggs culture.
This ensures a significant proportion of pay is delivered in shares
to provide alignment with investors and incorporates other best
practice features in line with the UK Corporate Governance Code
and investor guidelines.
The use of annual bonus deferral and PSP holding periods provides
a clear link to the ongoing performance of the business and
therefore alignment with shareholders.
The Committee has the discretion to apply malus and clawback in
both annual bonus and PSP.
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B. Remuneration Committee activity for the 52 weeks ended 30 December 2023
Meetings during the year
The Remuneration Committee met four times during the year. Details of the Committee
members’ attendance are given on page 70 .
All members are considered to be independent for the purpose of the UK Corporate
Governance Code. The Company Secretary acts as Secretary to the Committee.
Role and responsibilities
Responsibility is delegated to the Remuneration Committee to ensure that an effective
remuneration policy is in place for the Chief Executive, other Executive Directors, the
Chair and senior management, whilst reviewing and taking into account wider workforce
remuneration and the Company’s values and culture. It is the Committee’s role to establish a
remuneration policy that promotes both long-term shareholdings by Executive Directors and
ensures alignment of policies and practices to support business strategy, promote the
long-term sustainable success of the business and meet shareholder expectations.
Summary of Committee activity during 2023
Details of some of the activities the Committee has undertaken have been summarised below:
• Reviewed all colleague remuneration and the 2024 pay award for colleagues;
• Discussed and agreed Directors’ and Operating Board salaries for 2024;
• Discussed and agreed total reward for the wider workforce including pensions and family
leave;
• Agreed the stretching targets for the 2024 bonus and PSP and the new ESG metrics to
apply to the PSP in 2024;
• Reconsidered any potential windfall gains with regards to the PSP awards which vested
in October 2023;
• Considered fully the materiality of historical insurance claims related to business
interruption in 2020 in respect to remuneration outturns;
• Discussed the 2023 bonus outturn and 2021 PSP award vesting in the context of the original
performance targets set, as well as the wider socio-economic environment and the
experience of the wider workforce;
• Approved grants under the PSP to Executive Directors and Operating Board and under the
share option scheme to senior managers below Executive Director and Operating Board level;
• Approved the all-colleague SAYE and SIP schemes and the reduction of eligibility to three
months’ service;
• Discussed and agreed the fees for the Chair;
• Reviewed Executive Directors’ and Operating Board shareholdings in the Company, in the
context of shareholding guidelines; and
• Attended colleague forums to understand wider workforce views.
Structure and content of the Remuneration Report
The Remuneration Report has been prepared in accordance with the provisions of the
Companies Act 2006 (the ’Act’) and The Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013 (the ‘Regulations’). It also meets
the requirements of the UK Listing Authority’s Listing Rules.
The Regulations also require our auditor to report to shareholders on the audited information
within this Remuneration Report and to state whether, in their opinion, the relevant sections
have been prepared in accordance with the Act and the Regulations. The auditor’s opinion is
set out on pages 113 to 118 and we have indicated appropriately the audited sections of this
Remuneration Report.
Remuneration advice
The Chief Executive along with Jonathan Jowett (Company Secretary and General Counsel)
and Emma Walton (People Director) are normally invited to attend Committee meetings in order
to provide advice and support to the Committee. The Chief Financial Officer attends where
required. During the year Korn Ferry (which has no connection to the Company or any individual
Director) provided remuneration advice to the Committee. Korn Ferry were appointed as
advisers by the Committee in December 2017 following an informal tender process.
Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct in relation to
executive remuneration consulting in the UK.
The Committee reviewed the operating processes in place at Korn Ferry and is satisfied that
the advice it receives is objective and independent. Fees paid to Korn Ferry during the year
were £33,318. Korn Ferry provided other technical support to management in relation to
sourcing shares for the Employee Benefit Trust during 2023.
AGM voting outcomes
The Directors’ Remuneration Report was the subject of an advisory vote at the 2023 AGM and
the results are outlined below.
Approve the Remuneration Report
Total number
of votes
% of
votes cast
For
Against
73,407,337
569,032
99.23%
0.77%
Total votes cast (excluding votes withheld) 73,976,369 100.00%
Votes withheld 66,895
Total votes cast (including votes withheld) 74,043,264
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DIRECTORS’ REMUNERATION REPORT CONTINUED
Shareholders were asked to approve the remuneration policy at the 2023 AGM and the results
are outlined below:
Approve the remuneration policy
Total number
of votes
% of
votes cast
For
Against
72,411,666
1,564,590
97.89%
2.11%
Total votes cast (excluding votes withheld) 73,976,256 100.00%
Votes withheld 67,008
Total votes cast (including votes withheld) 74,043,264
C. How our remuneration policy will be implemented in 2024 – Executive Directors
The section below summarises the implementation of our remuneration policy for 2024.
Base salary 2024
The annual base salaries for the Executive Directors were reviewed with effect from 1 January
2024; increases and current salaries are outlined below:
Director
Salary
1 January 2023
Salary
1 January 2024 % increase
Roisin Currie (Chief Executive) £624,000 £652,080 4.5%
Richard Hutton (Chief Financial Officer) £409,032 £427,438 4.5%
With over 80% of the workforce receiving a pay increase of 9.6% for 2024, and over 97%
receiving 8.0%, the Committee is comfortable the increase for the Executive Directors is
appropriate, being proportionally lower than the wider workforce while ensuring that salary
for the Executive Directors does not fall materially behind mid-market levels.
Pension contribution 2024
We are delighted to confirm that we have increased the matched pension contribution for our
wider workforce from 4% of pay to 6% of pay as of January 2024. This ensures we continue to
support our colleagues in saving for their future as any contribution they wish to make up to a
maximum of 6% will now be matched by Greggs. All our Executive Directors have had their
pension contributions aligned to the majority of the workforce (previously 4% of salary) since
1 January 2023. As of January 2024 in order to remain aligned to the wider workforce the
pension contribution for our Executive Directors will be increased to 6% of salary.
The pension contribution rates for 2024 (all of which are cash in lieu) are:
Roisin Currie 6.0%
Richard Hutton 6.0%
Annual bonus 2024
The annual bonus opportunity for 2024 is outlined below:
Chief Executive Maximum opportunity of 125% of base salary. Bonus in excess of
50% of maximum will be payable in shares deferred for two years.
Chief Financial Officer Maximum opportunity of 125% of base salary. Bonus in excess of
50% of maximum will be payable in shares deferred for two years.
The annual bonus is based on performance against a range of financial and strategic
performance measures. This range of metrics measures achievement of the Company’s
key operational objectives. The Committee reviews the KPIs each year and varies them as
appropriate to reflect the priorities for the business in the year ahead. Where appropriate a
sliding scale of targets is set for each KPI to encourage continuous improvement or sustained
high performance, with a maximum of 10% bonus paid out for threshold performance for the
profit and sales elements.
Targets are normally set at the start of the year by the Committee using the outturn and
performance in the previous year, as well as the business plan, to determine appropriately
stretching sliding scales. Bonus targets for the forthcoming year are considered to be
commercially sensitive. Retrospective disclosure of the targets and performance against
them will be made in next year’s Annual Report on Remuneration.
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The bonus metrics are:
Measure Profit Sales Strategic objectives
Weighting 50% of total 20% of total 30% of total
Detail and link to
strategy
Reflects the profit of the
Group (excluding
exceptional items) before
tax. This will be based on
meeting and exceeding
budget for the year.
Based on company-
managed shop like-for-
like sales excluding any
additional shops opened
during the bonus year.
Outlined below.
The strategic objectives for each bonus cycle are based on measures which will provide a
strong link to strategy and our four key growth drivers as well as recognising our responsibility
and commitments in The Greggs Pledge.
For the 2024 bonus there will be five strategic objectives. They are:
• 10% based on business efficiency/cost savings;
• 5% based on growth in evening sales;
• 5% based on growth in delivery sales;
• 5% based on The Greggs Pledge and the increase in food redistribution; and
• 5% based on digital metrics linked to the Greggs App.
Following a review of performance by the Committee, any payment under the non-profit-
based element of the bonus may be scaled back (potentially to zero) at the discretion of the
Committee, in the event that the profit performance for the year is judged to be running
significantly below that required for the achievement of the long-term strategy.
PSP award 2024
PSP awards will be granted as follows:
Chief Executive 150% of base salary
Chief Financial Officer 150% of base salary
The PSP awards for the Executive Directors are normally granted in the period following the
announcement of the financial results for the prior year.
For the awards in FY2024 we will have three performance measures. We will keep both EPS and
ROCE, equally split at 45% of the award, and with an ESG metric comprising the remaining 10%
of the award. This will be a Scope 3 metric based on using our commercial leverage to engage
with our Supply Chain to drive measurement and public reporting of their Scope 1, 2 and 3
carbon footprint and to declare a public commitment to achieving net zero no later than 2050
(the UK Government legislative net zero date). This metric reflects the importance Greggs is
placing on the journey of both itself and its suppliers to carbon neutrality.
These measures provide a rounded assessment of our overall profitability against stretching
targets set in line with the strategic plan and business outlook over the performance period
as well as a strategic link to The Greggs Pledge targets.
For the 2024 awards the target ranges will be as follows:
• The EPS performance condition will require average annual growth in EPS over the
performance period to be between 5% and 10%;
• The ROCE condition will require average ROCE over the performance period to be between
18.4% to 20.8%; and
• The Carbon metric will be made up of two elements which will be measured at the end
of the performance period:
– 5% of the award based on suppliers’ measurement and public reporting (i.e. in their
Annual Report or Company website) of their overall carbon footprint (Scope 1, 2 and 3)
– % of total Scope 3 emissions with published Scope 1, 2 and 3 footprint
– Trigger (25% of award) – 30% of total footprint
– Maximum (100% of award) – 40% of total footprint
– 5% of the award will be based on suppliers publicly committing to a net zero target date
no later than 2050, the UK Government legislative net zero date.
– % of total Scope 3 emissions with net zero target date no later than 2050, the UK
Government legislative net zero date.
– Trigger (25% of award) – 40% of total footprint
– Maximum (100% of award) – 50% of total footprint
Our EPS growth range has been set from a high 2023 EPS base and, in the context of continued
market uncertainty and significant investment, the stretch element of this range would
represent outstanding performance. The business continues to deliver very strong ROCE
performance within the retail sector and as we seek to secure the benefits of investment in
the Supply Chain and our ambitious shop growth plans this range targets continued strong
returns on capital employed.
For all three performance measures, 25% of an award will vest on achieving threshold
performance and thereafter straight-line sliding scales will apply until stretch performance
is achieved. The performance period of this award will be 2024 to 2026.
A holding period is attached to vested PSP awards, requiring the vested shares to be held
(net of tax and other deductions) for a further two years.
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DIRECTORS’ REMUNERATION REPORT CONTINUED
How our remuneration policy will be implemented in 2024 – Non-Executive Directors
In order to ensure that no Director is involved in deciding their own remuneration, the fees
payable to Non-Executive Directors are set, after consultation with the Chair, by a Committee
of the Board consisting only of the Executive Directors. The fees payable to the Chair are set
by the Remuneration Committee.
The Non-Executive Directors are paid an annual base fee and additional responsibility fees
for the role of Senior Independent Director (‘SID’), for chairing a Board Committee or for being
the Non-Executive Director with responsibility for colleague engagement.
These fees are usually reviewed and set annually. The fees were increased by 4.5% on
1 January 2024 in line with the base salary increase agreed for Executive Directors and
similarly the fee for the Chair was increased by 4.5% on 1 January 2024.
Details of the fees being paid to Non-Executive Directors in 2024 are set out below:
Name Position
Base fee from
1 January 2024
Annual additional
fee from
1 January 2024 Total fee 2024
Matt Davies Board Chair £261,250 - £261,250
Kate Ferry Chair of the Audit
Committee £57,198 £13,042 £70,240
Mohamed Elsarky Non-Executive
Director with
responsibility for
colleague engagement £57,198 £5,225 £62,423
Lynne Weedall Chair of the
Remuneration
Committee £57,198 £13,042 £70,240
Nigel Mills Non-Executive
Director & SID £57,198 £13,042 £70,240
These fees may be subject to change during the year based on any change in responsibility
or time commitment or to ensure they remain in line with market rates.
D. How our remuneration policy was implemented in 2023
Total Executive Director remuneration payable for 2023 (audited)
The following table presents the remuneration payable for 2023 (showing the equivalent
figures for 2022) for the Executive Directors.
Salary
£
Pension contribution
(including salary in lieu)
£
Taxable benefits
3
£
Total fixed
remuneration
£
Annual incentives
(including profit share)
£
Performance
Share Plan
1
£
Total variable
remuneration
£
Total remuneration
£
Roisin Currie
2023 624,000 23,747 24,771 672,518 661,785 378,025 1,039,810 1,712,328
2022
4
490,909 18,453 17,902 527,264 440,832 270,118
2
710,950 1,238,214
Richard Hutton
2023 409,032 15,149 12,307 436,488 433,800 514,686 948,486 1,384,974
2022 393,300 38,046 12,105 443,451 370,685 405,107
2
775,792 1,219,243
1 The value of the PSP award for 2023, due to vest on 6 April 2024, is based on the level of vesting (100.0%) and the average share
price over the final three months of the 2023 financial year of £24.62. In the case of Roisin Currie, the value stated includes an
amount in respect of the restricted stock option which was granted in 2021 and which will vest in April 2024 (as explained further
on page 105 ). The amount attributable to share price appreciation is £29,160 for Roisin Currie and £39,701 for Richard Hutton.
This figure will be trued up in the 2024 Report to reflect the share price at the vesting date. Roisin Currie’s PSP award and her
restricted stock option were granted prior to her appointment as a Director.
2 For the 2022 PSP award the value last year was based on the average share price over the three months prior to the 2022 year
end of £21.47. The value has now been updated for the actual price on vesting on 9 October 2023 of £23.46, together with the
updated total remuneration figures. The values were increased by £22,913 for Roisin Currie and £34,363 for Richard Hutton.
3 Taxable benefits relate to cash-in-lieu of a company car, private medical health care and travel expenses paid.
4 Roisin Currie was appointed to the Board on 1 February 2022.
103Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
Fees for Non-Executive Directors (audited)
The fees for Non-Executive Directors were as follows:
2023 2022
Matt Davies
1
£250,000 £41,667
Helena Ganczakowski
4
£20,823 £60,261
Sandra Turner
5
£25,946 £63,603
Kate Ferry £67,215 £64,261
Mohamed Elsarky
2
£57,826 £52,630
Lynne Weedall
3
£67,215 £36,823
Nigel Mills
6
£52,443 -
1 Matt Davies joined the Board on 2 August 2022.
2 Mohamed Elsarky took on the role of the Non-Executive Director responsible for oversight of colleague engagement with effect
from 18 May 2023.
3 Lynne Weedall joined the Board on 17 May 2022 and took on the role of Remuneration Committee Chair as of 1 September 2022.
4 Helena Ganczakowski stepped down as Chair of the Remuneration Committee as of 31 August 2022 and retired from the Board
on 17 May 2023.
5 Sandra Turner retired from the Board on 17 May 2023.
6 Nigel Mills joined the Board on 7 March 2023 and was appointed as Senior Independent Director on 17 May 2023.
Annual bonus 2023 (audited)
The table below outlines the bonus performance conditions in respect of the 2023 bonus
scheme.
Measure Strategic objective Weighting Entry Target Stretch Actual %
Profit (£) To deliver target
profit before tax
(excluding
exceptional
items and
property profits) 50% £153.0m £161.0m £169.0m £167.7m 45.9%
Sales (%) Like-for-like
sales
performance 20% 11.5% 12.5% 13.5% 13.7% 20.0%
Strategic
(£)
Cost savings
10% £3.0m £5.0m £7.0m £7.02m 10.0%
Strategic
(£m/
week)
Evening sales
5% £130m £145m £160m £136.8m 1.4%
Measure Strategic objective Weighting Entry Target Stretch Actual %
Strategic Increase unsold
food
redistribution
1
5% 42.1% 47.9% 42.0% 0.0%
Strategic Increase in
digital
transactions
1
5% 7.3% 10.3% 12.4% 5.0%
Strategic Increase in total
% of waste
recycled
1
5% 40.6% 44.3% n/a
2
2.5%
Total weighting based on
balanced scorecard 100% 84.8%
1 Further details on these strategic targets are set out below.
2 With regards to the recycling target, the Committee needed to change the basis of the assessment to a more qualitative
approach due to an issue with the external measurement basis. An explanation for the 2.5% assessment for this element of the
bonus is included in the letter from the Chair of the Remuneration Committee on page 87 .
Increase food redistribution (5%)
Metric Maximum 5%
Distribute an
increased
percentage of unsold
food ahead of the
2022 end of year
actual of 38.3%
10% increase in
amount of unsold
food redistributed
year-on-year
(increase to 42.1%)
sliding scale to… 25% increase in
amount of unsold
food redistributed
year-on-year
(increase to 47.9%)
104
DIRECTORS’ REMUNERATION REPORT CONTINUED
Increase in digital transactions (5%)
Metric Maximum 5%
Increase % of
average transactions
involving a Greggs
App Rewards scan or
Click + Collect order
across the full year
2023 (1 Jan 2023 to
30 Dec 2023) ahead of
year end 2022 figure
of 6.3%
One percentage point
increase in average
transactions across
the year (increase to
7.3%)
sliding scale to… Four percentage
point increase in
average transactions
across the year
(increase to 10.3%)
Increase in recycling (5%)
1
Metric Maximum 5%
Increase total % of
waste recycled
across the business
ahead of the 2022
end of year actual
figure (36.9%)
10% increase in total
amount of waste
recycled (increase to
40.6%)
sliding scale to… 20% increase in total
amount of waste
recycled (increase to
44.3%)
1 As noted above, the Committee was unable to assess performance against these specific targets due to an issue with the
external measurement process.
Bonus achieved for 2023
As % of maximum
Roisin Currie 84.8%
Richard Hutton 84.8%
In line with the remuneration policy, the proportion of the bonus in excess of 50% of the
maximum (pro rata) will be payable in shares, deferred for two years.
Details of the shares awarded in 2023 for the 2022 bonus year are outlined below. These were
awarded on 25 March 2023 and will be released on 25 March 2025.
Number of shares awarded
Roisin Currie 3,077
Richard Hutton 2,514
Performance Share Plan award for performance in 2021 to 2023 (audited)
The PSP award granted in 2021 measured two performance targets to be achieved by the end
of 2023. The performance targets that were set, together with the performance achieved,
are set out in the table below.
Metric Condition Threshold target Stretch target Actual % vesting
EPS (50%) Absolute EPS
achieved in
2023
77.2p
(12.5% vesting)
105.3p
(50% vesting) 125.0p 50.0%
ROCE (50%) Absolute ROCE
achieved in
2023
14.8%
(12.5% vesting)
19.5%
(50% vesting) 21.1% 50.0%
Total vesting 100.0%
The Committee considered the vesting outcome in the context of overall Company performance,
the shareholder experience and the wider stakeholder experience over the performance period.
The Committee was satisfied that the vesting outcome was an appropriate reflection of wider
business performance and the experience of all stakeholders (including shareholders).
Accordingly, the Committee did not exercise any discretion to reduce the level of vesting.
105Greggs plc Annual Report and Accounts 2023
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DIRECTORS’ REPORTSTRATEGIC REPORT
The table below sets out the number of shares which will vest for each Executive Director
under the 2021 PSP award. All awards were granted as nil-cost options.
Executive Director Date of grant Date of vesting
Number of
shares
awarded Vesting %
Number of
shares
vesting
Expected
total vesting
1
Roisin Currie –
performance
measured PSP
2
6 April 2021 6 April 2024 9,668 100% 9,668 £238,017
Richard Hutton
– performance
measured PSP 6 April 2021 6 April 2024 20,906 100% 20,906 £514,686
1 Calculated using average share price over the final three months of the financial year of £24.62.
2 Options granted prior to Roisin Currie’s appointment as a Director.
In addition, a separate restricted stock option awarded to Roisin Currie in 2021 will vest in 2024
subject to her continued employment. This award was granted prior to her appointment as a
Director and was consistent with awards granted to other members of the Operating Board
at that time. A value for this award has been recorded in the single total figure table on the
following basis:
Executive Director Date of grant Date of vesting
Number of
shares
awarded Vesting %
Number of
shares
vesting
Expected
total vesting
1
Roisin Currie –
restricted stock
option PSP
1
6 April 2021 6 April 2024 5,687 100% 5,687 £140,009
1 Calculated using average share price over the final three months of the financial year of £24.62.
Performance Share Plan awards granted in 2023 (audited)
Performance Share Plan awards granted during 2023 are as follows:
Executive Type of award
Basis of award
granted
Share price
and date of
grant
Number of
shares over
which award
was granted
Face value of
award
Percentage of
face value that
would vest at
threshold
performance
Vesting
performance
measurement
period
Roisin
Currie
Nil-cost
options
150% of
salary
£27.80
(18 May
2023) 33,669 £935,998
25%
Financial
year 2025
Richard
Hutton
150% of
salary
£27.80
(18 May
2023) 22,070 £613,546
For the 2023 grant there are three independent performance targets applying to the awards.
Two of the performance targets each account for 45% of the award and one performance
target accounts for 10% of the award:
• 45% is subject to a performance target based on the Company’s average annual growth in
EPS over a performance period of three financial years commencing with the financial year
2023 being between 4.0% and 9.0%.
• 45% is subject to a performance target based on the Company’s average ROCE over a
performance period of three financial years commencing with the financial year 2023 to be
in the range 18.7% to 21.2%.
• 10% is subject to a performance target based on the Company’s reduction in Scope 1 and 2
CO
2
e emissions from the 2022 end of year baseline. 25% will vest if absolute CO
2
e
emissions are maintained at 2022 levels despite business growth and 100% will vest if
absolute emissions are reduced in line with our 2035 net zero target for Scope 1 and 2
(35,371 tCO
2
e).
For each metric, 25% of the award will vest on achieving threshold performance and
thereafter straight-line sliding scales will apply until stretch performance is achieved.
A holding period will apply to vested PSP awards requiring the vested shares to be held
(net of tax) for a further two years.
106
DIRECTORS’ REMUNERATION REPORT CONTINUED
Outstanding share awards (audited)
The following table sets out details of the PSP and savings-related share options held by,
or granted to, the Executive Directors who served during the year:
At 1 January
2023 or date of
appointment
Granted
number
Exercised
number
Lapsed
number
At
30 December
2023 number
Exercise price
Date of grant
Market price of
each share at
date of grant
Date from
which
exercisable
Expiry date
Scheme
Roisin
Currie
5,902 - - - 5,902 £nil Apr 19 £18.30 Apr 22 Apr 29 PSP
15,352 - - 3,838 11,514 £nil Oct 20 £14.07 Oct 23 Oct 30 PSP
5,687 - - - 5,687 £nil Apr 21 £22.72 Apr 24 Apr 31
Restricted
stock
option
3
9,668 - - - 9,668 £nil Apr 21 £22.72 Apr 24 Apr 31 PSP
36,014 - - - 36,014 £nil May 22 £21.68 May 25 May 32 PSP
- 33,669 - - 33,669 £nil May 23 £27.62 May 26 May 33 PSP
88 - 88
1
- - £14.24 Apr 20 Jun 23 Nov 23 SAYE
75 – – – 75 £16.72 Apr 21 Jun 24 Nov 24 SAYE
91 – – – 91 £19.68 Apr 22 Jun 25 Nov 25 SAYE
- 94 - - 94 £21.06 May 23 Jun 26 Nov 26 SAYE
72,877 33,763 88 3,838 102,714
Richard
Hutton
23,024 – – 5,756 17,268 £nil Oct 20 £14.07 Oct 23 Oct 30 PSP
20,906 - – – 20,906 £nil Apr 21 £22.72 Apr 24 Apr 31 PSP
23,607 - - - 23,607 £nil May 22 £21.68 May 25 May 32 PSP
- 22,070 - - 22,070 £nil May 23 £27.62 May 26 May 33 PSP
88 – 88
2
– - £14.24 Apr 20 Jun 23 Nov 23 SAYE
75 – – – 75 £16.72 Apr 21 Jun 24 Nov 24 SAYE
91 - – - 91 £19.68 Apr 22 Jun 25 Nov 25 SAYE
- 94 - - 94 £21.06 May 23 Jun 26 Nov 26 SAYE
67,791 22,164 88 5,756 84,111
1 The market value on the date of exercise was £24.76 and the resultant gain on exercise was £926.
2 The market value on the date of exercise was £26.86 and the resultant gain on exercise was £1,110.
3 The restricted stock option was granted in April 2021 prior to Roisin Currie’s appointment to the Board.
The award vests in April 2024 subject to continued employment and is in line with similar awards granted to other members of
the Operating Board at the time.
Options granted under the all-colleague SAYE scheme are not subject to performance
conditions. All PSP options are subject to performance conditions as detailed elsewhere
in this Report.
The mid-market price of ordinary shares in the Company as at 30 December 2023 was £26.02.
The highest and lowest mid-market prices of ordinary shares during the financial year were
£29.04 and £22.82 respectively.
Legacy defined benefit pension scheme (audited)
The following table sets out the change in each Director’s accrued pension in the Company’s
defined benefit pension scheme during the year and their accrued benefits in the scheme at
the year end:
Executive Director Date of birth
Date service
commenced
Accrued
annual
pension
entitlement
as at
1 January
2023
£
Accrued
annual
pension
entitlement
as at
30 December
2023
£
Increase in
accrued
pension
entitlement
for the year
£
Increase in
accrued
pension
entitlement
for the year
net of
inflation of
1.473%
£
Transfer
value of
increase in
accrued
pension
entitlement
for the year
£
Richard Hutton 3/6/68 1/1/98 24,782 27,283 – – –
1 The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year, but
excluding any statutory increases which would be due after the year end.
2 The inflation rate of 1.473% shown in the table above is that published by the Secretary of State for Work and Pensions in
accordance with Schedule 3 of the Pensions Schemes Act 1993.
Cash equivalent transfer
value as at 31 December 2022
£
Cash equivalent transfer
value as at 30 December 2023
£
Increase in the cash
equivalent transfer value
since 1 January 2023
£
Richard Hutton 443,334 392,930 –
Cash equivalent transfer values have been calculated in accordance with Actuaries Guidance Note GN11 and the increase is stated
net of contributions made by the Director. The transfer values disclosed above do not represent a sum paid or payable to the
individual Director. Instead they represent a potential liability of the pension scheme.
The main features of the defined benefit pension scheme are:
– Pension at normal retirement age of 1/60
th
of member’s final pensionable salary for each complete year and a proportionate
amount for each additional complete month of service from the date of joining the scheme until 5 April 2008 when the scheme
was closed to future accrual;
– Choice of giving up part of the pension in exchange for a tax-free cash sum subject to a limit of 25% of the total value of the
member’s benefits under the scheme;
– Pension payable in the event of ill health;
– Spouse’s pension on death; and
– Normal retirement at age 65.
107Greggs plc Annual Report and Accounts 2023
ACCOUNTS
DIRECTORS’ REPORTSTRATEGIC REPORT
Chief Executive pay compared to performance
The graph below shows a comparison of the total shareholder return for the Company’s shares
for each of the last ten financial years against the total shareholder return for the companies
comprised in the FTSE 250 Index (excluding Investment Trusts).
This index has been chosen for this comparison because it includes companies of broadly
similar size to the Company.
Total Shareholder Return (£)
Greggs
28 Dec
2013
03 Jan
2015
02 Jan
2016
31 Dec
2016
02 Jan
2021
28 Dec
2019
30 Dec
2017
29 Dec
2018
30 Dec
2023
31 Dec
2022
01 Jan
2022
0
1,000
800
900
700
600
500
400
300
200
100
FTSE 250 Index (excluding Investment Trusts)
Remuneration outcomes for Chief Executive over last ten years
The table below shows the total remuneration figure for the Chief Executive over the same ten-year period as the graph above. The total remuneration figure includes the annual bonus, pension
and PSP/option awards which vested based on performance in those years.
2014 2015 2016 2017 2018 2019 2020 2021
2022
Roger Whiteside
2022
Roisin Currie* 2023
Total remuneration £1,238,248 £2,473,695 £2,147,229 £1,689,265 £1,737,953 £2,540,966 £649,319 £1,839,679 £1,064,204 £1,238,214 £1,712,329
Bonus (% of max potential) 100.0% 93.7% 86.7% 64.3% 59.2% 97.7% 0.0% 99.7% 75.4% 75.4% 84.8%
PSP/options
(% max potential) n/a 100% 100% 100% 80.2% 100% 0.0% 50% 75% 75% 100%
* Reflects pay in the Chief Executive role during 2022.
108
DIRECTORS’ REMUNERATION REPORT CONTINUED
Directors’ shareholding and share interests (audited)
Details of the shareholdings of each Executive Director and their connected persons as
at 30 December 2023 and their interests in shares are detailed below with the percentage
holding calculated using the share price at that date. As stated in the Directors’ remuneration
policy, Executive Directors are required to build a shareholding equivalent in value to 200%
of basic salary.
Director
Beneficially
owned at
30 December
2023
Beneficially
owned at
1 January
2023
Outstanding
PSP awards
(nil cost
options)
Outstanding
Restricted
stock
options
Vested
PSP
awards not
exercised
Outstanding
SAYE awards
%
shareholding
achieved at
30 December
2023
3
Roisin Currie 6,703 3,431 96,767 5,687
2
20,544 260 73.4%
Richard Hutton 103,456 106,934 83,851 – 17,268 260 716.3%
Helena
Ganczakowski
1
1,100 1,100 – – – – n/a
Sandra Turner
1
1,000 1,000 – – – – n/a
Kate Ferry 562 562 – – – – n/a
Mohamed
Elsarky - - – – – – n/a
Lynne Weedall 1,000 1,000 – – – – n/a
Matt Davies 2,000 2,000 – – – – n/a
Nigel Mills - - – – – – n/a
1 Helena Ganczakowski and Sandra Turner retired from the Board on 17 May 2023 and the shareholdings in the table above reflect
the position on that date.
2 The restricted stock options were granted in April 2021 prior to Roisin Currie’s appointment to the Board. The award vests in
April2024 subject to continued employment and is in line with similar awards granted to other members of the Operating Board
at the time.
3 Percentage shareholding is calculated taking into account the value of beneficially owned shares and the net of tax value of
vested PSP awards not exercised.
There have been no changes since 30 December 2023 in the Directors’ interests noted above.
Further details of outstanding share awards are given on page 106 .
Payments for loss of office or payments to past Directors (audited)
Roger Whiteside stepped down as Chief Executive and from the Board on 17 May 2022. Details
of the payments made in connection with his departure were included in last year’s report.
His outstanding PSP awards vest at the normal time subject to the satisfaction of the
agreed performance targets. The awards granted in 2021 have been pro-rated to reflect the
proportion of the vesting period completed at the time employment ceased at the end of his
notice period. The vesting outcome of the award granted in 2021 is shown on page 88 .
External directorships
Executive Directors may take up one Non-Executive Directorship outside of the Company
subject to the Board’s approval and provided that such an appointment is not likely to lead
to a conflict of interest. It is recognised that this can support a Director’s development and
enhance experience as well as benefit the Company. Executive Directors will be entitled to
retain the fees of such an appointment.
Relative importance of spend on pay
The Committee is aware of the importance of pay across the business and the table below
shows the expenditure and percentage change in the overall spend on all colleague costs
compared to other key financial indicators.
2023
£m
2022
£m
%
increase/
(decrease)
All colleague costs 593.1 502.7 18.0%
Dividends 60.8 98.5 (38.3%)
109Greggs plc Annual Report and Accounts 2023
ACCOUNTS
DIRECTORS’ REPORTSTRATEGIC REPORT
Percentage change in remuneration of all Directors
The table below sets out the percentage change in remuneration for all Directors (Executive and Non-Executive) compared to the wider workforce.
2023 2022 2021 2020
Salary
% change
Benefits
% change
Bonus
% change
Salary
% change
Benefits
% change
Bonus
% change
Salary
% change
Benefits
% change
Bonus
% change
Salary
1
% change
Benefits
% change
Bonus
% change
Roisin Currie 4.0% 32.4% 50.1% n/a
2
n/a n/a n/a n/a n/a n/a n/a n/a
Richard Hutton 4.0% 1.7% 17.0% 3.5% 27.4% (2.2%) 21.6% (9.0%) 100.0% (3.3%) (13.6%) (100.0%)
Matt Davies 0.0% n/a n/a n/a
2
n/a n/a n/a n/a n/a n/a n/a n/a
Helena Ganczakowski 4.0%
4
n/a n/a (1.25%)
3
n/a n/a 18.3%
3
n/a n/a 7.5%
3
n/a n/a
Sandra Turner 5.7%
4
n/a n/a 8.8% n/a n/a 9.2% n/a n/a (5.0%) n/a n/a
Kate Ferry 4.6% n/a n/a 5.3% n/a n/a 10.9% n/a n/a (8.3%) n/a n/a
Lynne Weedall 4.6% n/a n/a n/a
2
n/a n/a n/a n/a n/a n/a n/a n/a
Mohamed Elsarky 9.9%
9
n/a n/a 3.5% n/a n/a n/a
5
n/a n/a n/a n/a n/a
Nigel Mills n/a
8
n/a n/a
All colleagues 9.4%
6
9.4%
7
5.8% (15.8%) (24.3%) 1.9% (1.2%) 100% 4.1% 3.2% (100%)
1 For the period of 1 April 2020 to 31 August 2020 the salaries of the Executive Directors and Non-Executive Directors were
voluntarily reduced by 20%.
2 Roisin Currie, Matt Davies and Lynne Weedall were appointed during 2022 and therefore no annual change is shown.
3 Helena Ganczakowski was appointed Chair of the Remuneration Committee during 2020 and stepped down during 2022.
Therefore she received an additional payment for this role for part of these years.
4 In order to provide a meaningful comparison where a Director was appointed or retired during the year, the percentage change
figures have been calculated on a full-year equivalent value.
5 Mohamed Elsarky was appointed during 2021 and therefore no annual change is shown.
6 For the purpose of salary the wider workforce is defined as all colleagues.
7 For the purpose of bonus the wider workforce is defined as management colleagues who are entitled to receive a bonus.
8 Nigel Mills was appointed during 2023 and therefore no annual charge is shown.
9 Mohamed Elserky was appointed as Non-Executive Director responsible for colleague engagement during 2023 and therefore
received an additional payment for this role for part of the year.
Chief Executive pay ratio reporting
Outlined below is the ratio of the Chief Executive’s single figure of total remuneration for 2023
expressed as a multiple of total remuneration for UK colleagues.
The three ratios referenced below are calculated by reference to the colleagues at the 25
th
,
50
th
and 75
th
percentile. We additionally disclose the total pay and benefits and base salary
of the colleagues used to calculate the ratios.
In time, the table below will build to represent ten years of data:
Financial year Method
25
th
percentile
pay ratio
Median
pay ratio
75
th
percentile
pay ratio
2023 Option B 69:1 64:1 61:1
2022 Option B 90:1 84:1 80:1
2021 Option B 99:1 98:1 68:1
2020 Option B 30:1 30:1 28:1
2019 Option B 132:1 126:1 108:1
The 25
th
, median and 75
th
percentile data were calculated as at 6 January 2024. Full-year pay
data for the 2023 financial year has been used to calculate the ratios.
Disclosure of colleague data used to calculate the ratios 25
th
percentile Median 75
th
percentile
Total pay and benefits £24,826 £26,533 £25,973
Base salary £23,853 £ 25,490 £26,853
110
The following adjustments have been made in order to calculate the figures above:
• We have used the assumption of a 40-hour week in order to calculate the hourly rate for the
Chief Executive from the single total remuneration figure;
• As the hours our colleagues work vary week-to-week we have converted their hourly rate
of pay into the equivalent 40-hour week in order that this is directly comparable with the
hourly rate for the Chief Executive.
• For the 2022 figure for the Chief Executive we used a combined calculation for Roisin Currie
and Roger Whiteside, based on the number of days each served as Chief Executive in 2022.
Of the three options set out in the legislation for calculating the Chief Executive pay ratio,
we are using Option B – which uses Gender Pay Gap (‘GPG’) data – to calculate the pay ratio.
We believe the steady nature of our workforce ensures that the representative group remains
the same as those individuals who are identified through the GPG reporting process. The
individuals represented at the 25
th
, median and 75
th
percentile are all colleagues within our
front line Retail and Supply operations. The nature of our workforce and demographics are
such that we have over 95% of our colleagues working in our front-line operations – be that
in Retail or in our Supply Chain.
Our pay reflects the key markets in which we operate and we also support our colleagues with
additional benefits such as profit share, paid breaks, colleague discount and discounted SAYE
participation which from 2024 will be available to all colleagues with three months service or
more (a reduction from one year’s service). As previously outlined in this Report, a key focus
continues to be workforce fairness and the pay arrangements and support provided to our
colleagues across the business. Our people are what makes our business successful and
protecting our culture alongside our shareholders’ and wider stakeholders’ interests remains
our priority.
We have once again reviewed carefully the approach taken with the wider workforce when
considering the approach to salary for the Executive Directors for the year ahead. As noted
earlier in the Remuneration Report, the 2024 pay award agreed for our wider workforce
consisted of a base pay award of 8%, with an additional 1.6% (9.6% in total) for our hourly-paid
Retail colleagues – Retail Supervisors, Retail Senior Team Members and Retail Team Members.
On this basis, over 97% of our workforce received a pay increase of 8% or more and 80%
received 9.6% or more. This pay increase was implemented from January 2024 for all our
colleagues. For our graded management population, we again implemented a tiered pay
award. Our management colleagues received a base increase of 7% with our senior managers’
pay awards ranging between 5.5% and 6%.
Once again, as in 2023, the Committee reviewed the pay award of both the Executive Directors
and Operating Board and agreed that the awards should again be proportionally lower than the
general increases across the wider workforce and this was set at 4.5%.
As well as pay, we have also focused on the benefits our colleagues receive. Following
feedback from our teams, we are delighted that our colleagues have benefited from a
significant enhancement to our family leave policies in 2023 and from January 2024 we have
increased the pension provision for our wider workforce, allowing our colleagues to increase
their pension up to 6% with matched contributions. In order to further encourage colleague
ownership in the business we are also reducing the eligibility criteria to three months for all
colleagues to participate in our all-colleagues share schemes.
As such and as required in the regulations, we confirm our belief that the median pay ratio for
the year is consistent with the Company’s wider pay, reward and progression policies affecting
our colleagues.
This Report was approved by the Board on 5 March 2024,
Signed on behalf of the Board.
Lynne Weedall
Chair of the Remuneration Committee
5 March 2024
DIRECTORS’ REMUNERATION REPORT CONTINUED
111Greggs plc Annual Report and Accounts 2023
ACCOUNTS
DIRECTORS’ REPORTSTRATEGIC REPORT
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STATEMENT OF DIRECTORS’
RESPONSIBILITIES IN RESPECT OF
THE ANNUAL REPORT AND ACCOUNTS
The Directors are responsible for preparing the
Strategic Report and the Directors’ Report, the
Directors’ Remuneration Report and the Accounts
in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group
and Parent Company accounts for each financial year. The
Directors have elected under company law and are required
under the Listing Rules of the Financial Conduct Authority to
prepare the Group accounts in accordance with UK-adopted
International Accounting Standards. The Directors have
elected under company law to prepare the Company
accounts in accordance with UK-adopted International
Accounting Standards.
The Group and Parent Company accounts are required by
law and UK-adopted International Accounting Standards
to present fairly the financial position of the Group and the
Parent Company and the financial performance of the Group;
the Companies Act 2006 provides in relation to such
accounts that references in the relevant part of that Act to
accounts giving a true and fair view are references to their
achieving a fair presentation.
Under company law the Directors must not approve the
accounts unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the
Parent Company and of the profit or loss of the Group
for that period.
In preparing each of the Group and Parent Company
accounts, the Directors are required to:
a. Select suitable accounting policies and then apply them
consistently;
b. Make judgements and accounting estimates that are
reasonable and prudent;
c. State whether they have been prepared in accordance
with UK-adopted International Accounting Standards;
and
d. Prepare the accounts on the going concern basis unless
it is inappropriate to presume that the Group and the
Parent Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and the Parent Company’s transactions and
disclose with reasonable accuracy at any time the financial
position of the Group and the Parent Company and enable
them to ensure that the Accounts and the Directors’
Remuneration Report comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of
the Group and the Parent Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
112
Directors’ Statement pursuant to the Disclosure
and Transparency Rules
Each of the Directors, whose names and functions are listed
in the Directors’ Report confirm that, to the best of each
person’s knowledge:
a. The accounts, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit of the
Parent Company and the undertakings included in the
consolidation taken as a whole; and
b. The Strategic Report and the Directors’ Report
contained in the Annual Report include a fair review of the
development and performance of the business and the
position of the Company and the undertakings included
in the consolidation taken as a whole, together with
a description of the principal risks and uncertainties
that they face.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Greggs plc website.
Legislation in the United Kingdom governing the preparation
and dissemination of accounts may differ from legislation in
other jurisdictions.
Roisin Currie Richard Hutton
Chief Executive Chief Financial Officer
5 March 2024
STATEMENT OF DIRECTORS’ RESPONSIBILITIES CONTINUED
113Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC
Opinion
We have audited the financial statements of Greggs plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the 52 weeks ended 30 December 2023 which comprise
Consolidated Income Statement, the Consolidated Statement of Comprehensive Income,
Balance Sheets, Statements of Changes in Equity, Statement of cash flows and Notes to
the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in the preparation of the Group financial statements is
applicable law and UK-adopted International Accounting Standards. The financial reporting
framework that has been applied in the preparation of the Parent Company financial
statements is applicable law and UK-adopted International Accounting Standards and,
as regards the Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 30 December 2023 and of the Group’s profit for the
52 weeks then ended;
• the Group financial statements have been properly prepared in accordance with
UK-adopted International Accounting Standards;
• the Parent Company financial statements have been properly prepared in accordance
with UK-adopted International Accounting Standards and as applied in accordance with
the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of
the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public interest entities and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Summary of our audit approach
Key audit matters Group & Parent Company
Valuation of Lease Liabilities
Materiality Group
Overall materiality: £8.20 million (2022: £7.00 million)
Performance materiality: £6.15 million (2022: 5.25 million)
Parent Company
Overall materiality: £8.00 million (2022: £6.90 million)
Performance materiality: £6.00 million (2022: 5.17 million)
Scope Our audit procedures covered 100% of revenue, total assets
and profit before tax.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the Group and Parent Company financial statements of the current
period and include the most significant assessed risks of material misstatement (whether or
not due to fraud) we identified, including those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the Group
and Parent Company financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
114
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC CONTINUED
Valuation of Lease Liabilities
Key audit matter description Refer to page 82 – Audit Committee Report
Refer to pages 126 and 127 – Basis of preparation (Key estimates and judgements)
Refer to pages 144 and 145 – Note 11, Leases
Lease Liability – £319.6 (2022: £301.3 million)
The Group occupies and manages approximately 1,900 shops/leases, the application of IFRS 16 is considered to give rise to a significant risk of material misstatement. IFRS 16 involves
a significant element of judgement and estimation derived from a number of key assumptions. We consider the most significant assumptions affecting the valuation of lease liabilities
to be:
• the lease term assumed in determining the lease liability (particularly in respect of circumstances where the Group remains in occupation using rights from the Landlord and
Tenant Act 1954); and
• the discount rate applied to calculate the lease liability.
Changes to the assumptions included above are likely to have a material impact on the valuation of lease liabilities and given the value of lease liabilities in comparison to Group
materiality, we consider this area to represent a significant audit risk. Given the economic uncertainty and changing needs of the business in terms of shop size and location,
judgements made in respect of lease term may need to be revisited.
How the matter was
addressed in the audit
Our audit work relating to lease liabilities included:
1. Testing the accuracy and completeness of the underlying data/leases used in the application of IFRS 16.
2. Critically assessing the key assumptions utilised by management, including the lease term and discount rate.
3. Testing that the calculations made were accurate through reperformance.
4. Assessing the application of and accounting for changes throughout the year including the treatment of new leases, modifications to leases, the unwinding of interest and capital
payments in respect of lease liabilities.
5. Review disclosures relating to lease liabilities to ensure they are in accordance with the applicable financial reporting framework.
Key observations Our audit work in respect of the valuation of lease liabilities concluded that we did not identify any material misstatements and the disclosures management have made are appropriate.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit procedures. When evaluating whether the effects of
misstatements, both individually and on the financial statements as a whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the
size of the misstatements. Based on our professional judgement, we determined materiality as follows:
Group Parent Company
Overall materiality £8.2 million (2022: £7.0 million) £8.0 million (2022: £6.90 million)
Basis for determining overall materiality 4.9% (2022: 4.7%) of profit before tax excluding exceptional items 4.7% (2022: 4.7%) of profit before tax excluding exceptional items
Rationale for benchmark applied Profit before tax is the primary measure used by the shareholders in assessing the performance of the Group and is a generally accepted auditing benchmark.
Performance materiality £6.15 million (2022: £5.25 million) £6.0 million (2022: £5.17 million)
Basis for determining performance
materiality
75% of overall materiality (2022: 75%) 75% of overall materiality (2022: 75%)
Reporting of misstatements to the
Audit Committee
Misstatements in excess of £410k (2022: £350k) and misstatements below that
threshold that, in our view, warranted reporting on qualitative grounds.
Misstatements in excess of £400k (2022: £345k) and misstatements below that
threshold that, in our view, warranted reporting on qualitative grounds.
The materiality for the audit, was reassessed to reflect the actual results for the period-end. This did not result in any change in the original materiality.
115Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
An overview of the scope of our audit
The Group consists of the Parent Company and nine subsidiaries all of which are dormant or
non-trading. The Group audit team audited the only significant component being the Parent
Company. In doing so the coverage achieved by our audit procedures was 100% of Group
revenue, total assets and profit before tax.
The impact of climate change on the audit
In planning our audit, we considered the potential impact of the possible risks arising from
climate change on the Group’s and the Company’s financial statements and obtained an
understanding of how management identifies and responds to climate-related risks. Further
information on management’s risk assessment, progress and commitments is provided in the
Group’s climate-related risk disclosures on pages 46 to 53 of the Annual Report.
We performed risk assessment procedures including making enquiries of management,
reading Board minutes and applying our knowledge of the Group and the Company and the
sector within which it operates, to assess the potential impact on the financial statements.
Taking account of the nature of the business, the extent of the headroom in impairment
testing to reasonably possible changes in future cashflows, and useful economic lives of
tangible/intangible assets to changing regulation, weather patterns or business activities,
we have not assessed climate-related risk to be significant to our audit. There was also no
impact on our key audit matters.
In accordance with our obligations with regards to other information, we have read the
Group’s climate-related risk disclosures on pages 46 to 53 of the Annual Report and in doing
so have considered whether those disclosures are materially inconsistent with the financial
statements or our knowledge obtained during the course of the audit, or otherwise appear
to be materially misstated.
We have not been engaged to provide assurance over the accuracy of the climate-related risk
disclosures set out on pages 46 to 53 in the Annual Report.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability
to continue to adopt the going concern basis of accounting included:
1. Assess the forward-looking assumptions used by management in their assessment
of going concern.
2. Corroborate to supporting evidence provided by the management key assumptions
including financing arrangements in place.
3. Challenge management’s assumptions including performing downside sensitivities
in respect of key assumptions.
4. Consider the adequacy of management’s scenario analysis and contingency plans.
5. Check the integrity and mechanism of the forecast model provided by management,
using specialists where we consider it to be necessary.
6. Obtain evidence of Board approval of the budgets and forecasts.
7. Assess the historical forecasting accuracy.
8. Recalculating management’s covenant calculations to assess the risk of forecast
non-compliance.
9. Evaluating the adequacy of going concern-related disclosures in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties
relating to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s or the Parent Company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In relation to the entity reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the Directors considered it appropriate
to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern
are described in the relevant sections of this report.
Other information
The other information comprises the information included in the Annual Report other than the
financial statements and our auditor’s report thereon. The Directors are responsible for the
other information contained within the Annual Report. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon.
116
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC CONTINUED
Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial
year for which the financial statements are prepared is consistent with the financial
statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company
and their environment obtained in the course of the audit, we have not identified material
misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration
Report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement relating to the Parent Company’s
compliance with the provisions of the UK Corporate Governance Code specified for our review
by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the Corporate Governance Statement is materially consistent with
the financial statements and our knowledge obtained during the audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on page 73;
• Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 65;
• Director’s statement on whether it has a reasonable expectation that the Group will be able
to continue in operation and meets its liabilities set out on page 73;
• Directors’ statement on fair, balanced and understandable set out on page 73;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 61;
• Section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems set out on page 84; and,
• Section describing the work of the Audit Committee set out on pages 80 to 85.
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on pages 111 and
112, the Directors are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s
and the Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
117Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives
of our audit are to obtain sufficient appropriate audit evidence regarding compliance with
laws and regulations that have a direct effect on the determination of material amounts
and disclosures in the financial statements, to perform audit procedures to help identify
instances of non-compliance with other laws and regulations that may have a material
effect on the financial statements, and to respond appropriately to identified or suspected
non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material
misstatement of the financial statements due to fraud, to obtain sufficient appropriate
audit evidence regarding the assessed risks of material misstatement due to fraud through
designing and implementing appropriate responses and to respond appropriately to fraud
or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged
with governance, to ensure that the entity’s operations are conducted in accordance with the
provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities,
including fraud, the Group audit engagement team:
• obtained an understanding of the nature of the industry and sector, including the legal
and regulatory framework that the Group and Parent Company operate in and how the
Group and Parent Company are complying with the legal and regulatory framework;
• inquired of management, and those charged with governance, about their own
identification and assessment of the risks of irregularities, including any known actual,
suspected or alleged instances of fraud;
• discussed matters about non-compliance with laws and regulations and how fraud might
occur including assessment of how and where the financial statements may be susceptible
to fraud for regulated entities, as defined in ISA 250B: having obtained an understanding of
the effectiveness of the control environment.
The most significant laws and regulations were determined as follows:
Legislation/Regulation Additional audit procedures performed by the Group audit engagement team included:
IFRS/UK adopted IAS and
Companies Act 2006
• Review of the financial statement disclosures and testing to
supporting documentation
• Completion of disclosure checklists to identify areas of non-
compliance
Tax compliance regulations • Inspection and review of tax computations prepared by management
• Input from a tax specialist was obtained regarding significant and
complex matters
• Consideration of whether any matter identified during the audit
required reporting to an appropriate authority outside the entity
Distributable profits
legislation
• Assessment of compliance as part of our audit work relating to
reserves
Pension legislation • Assessment of extent of compliance as part of our audit work relating
to defined benefit pensions
Food Safety/Health and
Safety/Employment/General
Data Protection Regulation
• Inquiry of management and Directors
• Inspection of correspondence with legal advisors and regulators
(where applicable)
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk Audit procedures performed by the audit engagement team:
Revenue recognition
– cut off
• Testing a sample of transactions accounted pre and post-year-end for
each significant revenue stream ensuring that revenue is recognised
in the correct accounting period in line with the Group’s accounting
policy
Management override of
controls
• Testing the appropriateness of journal entries and other adjustments;
• Assessing whether the judgements made in making accounting
estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that
are unusual or outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: http://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.
118
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the
shareholders on 14 May 2021 to audit the financial statements for the 52-week period ended
1 January 2022 and subsequent financial periods.
The period of total uninterrupted consecutive appointments is three years, covering the years
ending 1 January 2022 to 30 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the
Group or the Parent Company and we remain independent of the Group and the Parent
Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee in
accordance with ISAs (UK).
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might
state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
In due course, as required by the Financial Conduct Authority (‘FCA’) Disclosure Guidance and
Transparency Rule (DTR) 4.1.14R, these financial statements will form part of the European
Single Electronic Format (‘ESEF’) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF Regulatory Technical Standard
(‘ESEF RTS’). This auditor’s report provides no assurance over whether the annual financial
report has been prepared using the single electronic format specified in the ESEF RTS.
Rachel Fleming (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
1 St. James’ Gate
Newcastle upon Tyne
NE1 4AD
5 March 2024
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC CONTINUED
119Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
CONSOLIDATED INCOME STATEMENT
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2022: 52 WEEKS ENDED 31 DECEMBER 2022)
| 2023 | 2023 | ||||
| Excluding | Exceptional | ||||
| exceptional | items | 2023 | |||
| items | (see Note 4) | Tota l | 2022 | ||
| Note | £m | £m | £m | £m | |
Revenue | 1 | ||||
Cost of sales | ( | ( | ( | ||
Gross profit | |||||
Distribution and selling costs | ( | ( | ( | ||
Administrative expenses | ( | ( | ( | ||
Other income | |||||
Operating profit | |||||
Finance expense (net) | 6 | ( | ( | ( | |
Profit before tax | 3-6 | ||||
Income tax | 8 | ( | ( | ( | ( |
Profit for the financial year attributable to equity holders of the Parent | |||||
Basic earnings per share | 9 | ||||
Diluted earnings per share | 9 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2022: 52 WEEKS ENDED 31 DECEMBER 2022)
| 2023 | 2022 | ||
| Note | £m | £m | |
Profit for the financial year | |||
| Other comprehensive income | |||
| Items that will not be recycled to profit and loss: | |||
Remeasurements on defined benefit pension plans | 21 | ||
Tax on remeasurements on defined benefit pension plans | 8 | ||
Other comprehensive income for the financial year, net of income tax | |||
Total comprehensive income for the financial year |
120
BALANCE SHEETS
AT 30 DECEMBER 2023 (2022: 31 DECEMBER 2022)
Group | Parent Company | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Note | £m | £m | £m | £m | |
| ASSETS | |||||
| Non-current assets | |||||
Intangible assets | 10 | 18.3 | 13.5 | ||
Property, plant and equipment | 12 | 510.9 | 390.6 | ||
Right-of-use assets | 11 | 296.6 | 281.6 | ||
Investments | 13 | 5.0 | 5.0 | ||
Defined benefit pension asset | 21 | 6.6 | 6.3 | ||
| Current assets | 837.4 | 697.0 | |||
Inventories | 15 | 48.8 | 40.6 | ||
Trade and other receivables | 16 | 53.8 | 50.2 | ||
Current tax assets | 19 | – | 0.6 | ||
Cash and cash equivalents | 17 | 195.3 | 191.6 | ||
297.9 | 283.0 | ||||
Total assets | 1,135.3 | 980.0 | |||
| LIABILITIES | |||||
| Current liabilities | |||||
Trade and other payables | 18 | ( | ( | (218.8) | (199.4) |
Current tax liabilities | 19 | ( | (4.9) | – | |
Lease liabilities | 11 | ( | ( | (52.5) | (48.8) |
Provisions | 22 | ( | ( | (4.0) | (3.6) |
| Non-current liabilities | ( | ( | (280.2) | (251.8) | |
Other payables | 20 | ( | ( | (2.3) | (2.8) |
Lease liabilities | 11 | ( | ( | (267.1) | (252.5) |
Deferred tax liability | 14 | ( | ( | (54.1) | (25.7) |
Long-term provisions | 22 | ( | ( | (2.2) | (2.7) |
( | ( | (325.7) | (283.7) | ||
Total liabilities | ( | ( | (605.9) | (535.5) | |
Net assets | 529.4 | 444.5 | |||
| EQUITY | |||||
| Capital and reserves | |||||
Issued capital | 23 | 2.0 | 2.0 | ||
Share premium account | 23 | 25.1 | 23.1 | ||
Capital redemption reserve | 23 | 0.4 | 0.4 | ||
Retained earnings | 501.9 | 419.0 | |||
Total equity attributable to equity holders of the Parent | 529.4 | 444.5 |
Of the Group profit for the year £142.5 million (2022: £120.3 million) is dealt with in the books of the Parent Company.
121Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
STATEMENTS OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2022: 52 WEEKS ENDED 31 DECEMBER 2022)
Group
52 weeks ended 31 December 2022
| Attributable to equity holders of the Company | ||||||
| Capital | ||||||
| Issued | Share | redemption | Retained | |||
| capital | premium | reserve | earnings | Total | ||
| Note | £m | £m | £m | £m | £m | |
Balance at 2 January 2022 | ||||||
| Total comprehensive income for the year | ||||||
Profit for the financial year | ||||||
Other comprehensive income | ||||||
Total comprehensive income for the year | ||||||
| Transactions with owners, recorded directly in equity | ||||||
Issue of ordinary shares | ||||||
Purchase of own shares | ( | ( | ||||
Share-based payment transactions | 21 | |||||
Dividends to equity holders | ( | ( | ||||
Tax items taken directly to reserves | 8 | ( | ( | |||
Total transactions with owners | ( | ( | ||||
Balance at 31 December 2022 |
52 weeks ended 30 December 2023
| Attributable to equity holders of the Company | ||||||
| Capital | ||||||
| Issued | Share | redemption | Retained | |||
| capital | premium | reserve | earnings | Tota l | ||
| Note | £m | £m | £m | £m | £m | |
Balance at 1 January 2023 | ||||||
| Total comprehensive income for the year | ||||||
Profit for the financial year | ||||||
Other comprehensive income | ||||||
Total comprehensive income for the year | ||||||
| Transactions with owners, recorded directly in equity | ||||||
Issue of ordinary shares | ||||||
Purchase of own shares | ( | ( | ||||
Sale of own shares | ||||||
Share-based payment transactions | 21 | |||||
Dividends to equity holders | ( | ( | ||||
Tax items taken directly to reserves | 8 | ( | ( | |||
Total transactions with owners | ( | ( | ||||
Balance at 30 December 2023 |
122
STATEMENTS OF CHANGES IN EQUITY CONTINUED
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2022: 52 WEEKS ENDED 31 DECEMBER 2022)
Parent Company
52 weeks ended 31 December 2022
Attributable to equity holders of the Company
Note
Issued
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Total
£m
Balance at 2 January 2022 2.0 20.0 0.4 405.3 427.7
Total comprehensive income for the year
Profit for the financial year 7 – – – 120.3 120.3
Other comprehensive income – – – 2.5 2.5
Total comprehensive income for the year – – – 122.8 122.8
Transactions with owners, recorded directly in equity
Issue of ordinary shares – 3.1 – – 3.1
Purchase of own shares – – – (11.0) (11.0)
Share-based payment transactions 21 – – – 3.6 3.6
Dividends to equity holders – – – (98.5) (98.5)
Tax items taken directly to reserves 8 – – – (3.2) (3.2)
Total transactions with owners – 3.1 – (109.1) (106.0)
Balance at 31 December 2022 2.0 23.1 0.4 419.0 444.5
52 weeks ended 30 December 2023
Attributable to equity holders of the Company
Note
Issued
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Tota l
£m
Balance at 1 January 2023 2.0 23.1 0.4 419.0 444.5
Total comprehensive income for the year
Profit for the financial year 7 – – – 142.5 142.5
Other comprehensive income – – – 0.4 0.4
Total comprehensive income for the year – – – 142.9 142.9
Transactions with owners, recorded directly in equity
Issue of ordinary shares – 2.0 – – 2.0
Purchase of own shares – – – (5.0) (5.0)
Sale of own shares 1.6 1.6
Share-based payment transactions 21 – – – 4.6 4.6
Dividends to equity holders – – – (60.8) (60.8)
Tax items taken directly to reserves 8 – – – (0.4) (0.4)
Total transactions with owners – 2.0 – (60.0) (58.0)
Balance at 30 December 2023 2.0 25.1 0.4 501.9 529.4
123Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
STATEMENTS OF CASH FLOWS
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2023: 52 WEEKS ENDED 31 DECEMBER 2022)
Group | Parent Company | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Note | £m | £m | £m | £m | |
| Operating activities | |||||
Cash generated from operations (see below) | 333.0 | 272.3 | |||
Income tax paid | ( | ( | (11.9) | (13.3) | |
Interest paid on lease liabilities | 6 | ( | ( | (9.6) | (6.8) |
Interest paid on borrowings and other related charges | 6 | ( | ( | (0.7) | (0.7) |
Net cash inflow from operating activities | 310.8 | 251.5 | |||
| Investing activities | |||||
Acquisition of property, plant and equipment | ( | ( | (189.5) | (100.0) | |
Acquisition of intangible assets | ( | ( | (8.6) | (3.3) | |
Proceeds from sale of property, plant and equipment | 0.8 | 0.9 | |||
Proceeds from sale of assets held for sale | – | 1.6 | |||
Interest received | 6 | 6.1 | 1.4 | ||
Net cash outflow from investing activities | ( | ( | (191.2) | (99.4) | |
| Financing activities | |||||
Proceeds from issue of share capital | 2.0 | 3.1 | |||
Sale of own shares | 1.6 | – | |||
Purchase of own shares | ( | ( | (5.0) | (11.0) | |
Dividends paid | ( | ( | (60.8) | (98.5) | |
Repayment of principal on lease liabilities | ( | ( | (53.7) | (52.7) | |
Net cash outflow from financing activities | ( | ( | (115.9) | (159.1) | |
Net increase/(decrease) in cash and cash equivalents | ( | 3.7 | (7.0) | ||
Cash and cash equivalents at the start of the year | 17 | 191.6 | 198.6 | ||
Cash and cash equivalents at the end of the year | 17 | 195.3 | 191.6 |
124
STATEMENTS OF CASH FLOWS CONTINUED
FOR THE 52 WEEKS ENDED 30 DECEMBER 2023 (2023: 52 WEEKS ENDED 31 DECEMBER 2022)
Cash flow statement – cash generated from operations
Group | Parent Company | ||||
| 2023 | 2022 | 2023 | 2022 | ||
| Note | £m | £m | £m | £m | |
Profit for the financial year | 142.5 | 120.3 | |||
Amortisation | 10 | 3.9 | 4.7 | ||
Depreciation – property, plant and equipment | 12 | 66.6 | 58.0 | ||
Depreciation – right-of-use assets | 11 | 54.5 | 52.8 | ||
Net impairment charge – property, plant and equipment | 12 | 1.4 | 1.2 | ||
Impairment charge – right-of-use assets | 11 | 2.5 | 0.0 | ||
Loss on sale of property, plant and equipment | 3 | 2.0 | 1.0 | ||
Release of Government grants | 3 | ( | ( | (0.5) | (0.4) |
Share-based payment expenses | 21 | 4.6 | 3.6 | ||
Finance expense | 6 | 4.0 | 6.1 | ||
Income tax expense | 8 | 45.8 | 28.0 | ||
Increase in inventories | ( | ( | (8.2) | (12.7) | |
Increase in receivables | ( | ( | (3.6) | (12.4) | |
Increase in payables | 18.0 | 30.8 | |||
Decrease in provisions | ( | ( | (0.5) | (0.7) | |
Decrease in pension liability | 21 | ( | – | (8.0) | |
Cash from operating activities | 333.0 | 272.3 |
125Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
NOTES TO THE CONSOLIDATED ACCOUNTS
Significant accounting policies
126
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
Significant accounting policies continued
(b) Basis of preparation continued
127Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
128
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
Significant accounting policies continued
129Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
130
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
Significant accounting policies continued
(h) Property, plant and equipment continued
131Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
132
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
Significant accounting policies continued
(p) Employee benefits continued
133Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
134
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
Significant accounting policies continued
(u) Income tax continued
135Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
| 2023 | 2023 | 2022 | 2022 | |||
| Retail company- | Business-to- | 2023 | Retail company- | Business-to- | 2022 | |
| managed shops | business | Tota l | managed shops | business | Total | |
| £m | £m | £m | £m | £m | £m | |
Revenue | 1,610.9 | 198.7 | 1,809.6 | 1,352.3 | 160.5 | 1,512.8 |
Trading profit* | 250.1 | 41.1 | 291.2 | 224.6 | 31.3 | 255.9 |
Overheads including profit share | (119.5) | (101.5) | ||||
Operating profit before exceptional items | 171.7 | 154.4 | ||||
Finance expense (net) | (4.0) | (6.1) | ||||
Profit before tax (excluding exceptional items) | 167.7 | 148.3 | ||||
Exceptional items (see Note 4) | 20.6 | - | ||||
Profit before tax | 188.3 | 148.3 |
136
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
2. Financial risk management
137Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
138
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
| 2023 | 2022 | |
| £m | £m | |
Amortisation of intangible assets | 3.9 | 4.7 |
Depreciation of owned property, plant and equipment | 66.6 | 58.0 |
Depreciation of right-of-use assets | 54.5 | 52.8 |
Net impairment of owned property, plant and equipment | 1.4 | 1.2 |
Net impairment of right-of-use assets | 2.5 | 0.0 |
Loss on disposal of property, plant and equipment | 2.0 | 1.0 |
Release of government grants | (0.5) | (0.4) |
4. Exceptional items
The exceptional item relates to:
• a net gain of £16.3 million on the settlement of a Covid-19 business interruption insurance claim. The net gain is recognised after deduction of fees payable to advisers and the £2.5 million
advance already recognised as income in 2020;
• a net gain of £4.0 million on the settlement of a business interruption insurance claim relating to flooding at the Treforest bakery in 2020;
• the £0.3m release of a previous provision for onerous leases no longer required.
| 2023 | 2022 | |
| Number | Number | |
Management | 723 | 660 |
Administration | 472 | 432 |
Production | 3,456 | 3,196 |
Shop | 25,434 | 22,640 |
30,085 | 26,928 |
| 2023 | 2022 | ||
| Note | £m | £m | |
Wages and salaries | 519.6 | 439.1 | |
Compulsory social security contributions | 38.2 | 33.8 | |
Pension costs – defined contribution plans | 21 | 30.3 | 26.5 |
Equity-settled transactions (including compulsory social security contributions) | 21 | 5.0 | 3.3 |
593.1 | 502.7 |
139Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
| 2023 | 2022 | |
| £m | £m | |
Cost of sales | 4.6 | 4.3 |
Distribution and selling costs | 10.9 | 10.3 |
Administrative expenses | 2.1 | 2.0 |
Amount shared with employees | 17.6 | 16.6 |
Compulsory social security contributions | 2.0 | 2.1 |
19.6 | 18.7 |
| 2023 | 2022 | |
| £m | £m | |
Salaries and fees | 3.5 | 4.4 |
Taxable benefits | 0.1 | 0.1 |
Annual bonus (including profit share) to be paid in March 2024 | 1.9 | 2.5 |
Post-retirement benefits | 0.2 | 0.3 |
Equity-settled transactions | 2.3 | 2.3 |
8.0 | 9.6 |
| 2023 | 2022 | |
| £m | £m | |
Aggregate Directors’ remuneration | 2.7 | 2.7 |
Aggregate amount of gains on exercise of share options | – | 0.2 |
2.7 | 2.9 |
140
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
| 2023 | 2022 | ||
| Note | £m | £m | |
Interest income on cash balances | 6.1 | 1.3 | |
Interest expense on borrowings and other related charges | (0.7) | (0.7) | |
Foreign exchange (loss)/gain | (0.1) | 0.1 | |
Interest on lease liabilities | (9.6) | (6.8) | |
Net interest income on defined benefit pension liability | 21 | 0.3 | 0.0 |
(4.0) | (6.1) |
7. Profit attributable to Greggs plc
Of the Group profit for the year, £142.5 million (2022: £120.3 million) is dealt with in the accounts of the Parent Company. The Company has taken advantage of the exemption permitted by s408
of the Companies Act 2006 from presenting its own income statement.
8. Income tax expense
Recognised in the income statement
| 2023 | ||||
| Excluding | 2023 | |||
| exceptional | Exceptional | 2023 | 2022 | |
| items | items | Tota l | Total | |
| £m | £m | £m | £m | |
| Current tax | ||||
Current year | 12.2 | 4.8 | 17.0 | 14.1 |
Adjustment for prior years | 0.7 | – | 0.7 | (0.2) |
12.9 | 4.8 | 17.7 | 13.9 | |
| Deferred tax | ||||
Origination and reversal of temporary differences | 29.0 | – | 29.0 | 14.1 |
Adjustment for prior years | (0.9) | – | (0.9) | 0.0 |
28.1 | – | 28.1 | 14.1 | |
Total income tax expense in income statement | 41.0 | 4.8 | 45.8 | 28.0 |
141Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Reconciliation of effective tax rate
The tables below explain the differences between the expected tax expense calculated at the UK statutory rate of 23.5% (2022: 19%) and the actual tax expense for each year for both the total tax
expense and the underlying tax expense, excluding the effect of exceptional items.
| 2023 | 2023 | |||||
| Excluding | Excluding | 2023 | 2022 | |||
| exceptional | exceptional | 2023 | Tota l | 2022 | Total | |
| items | items £m | Tota l | £m | Total | £m | |
Profit before tax | 167.7 | 188.3 | 148.3 | |||
Income tax using the domestic corporation tax rate | 23.5% | 39.4 | 23.5% | 44.2 | 19.0% | 28.1 |
Items not taxable for tax purposes | (0.6%) | (1.0) | (0.6%) | (1.0) | (2.9%) | (4.3) |
Non-tax-deductible depreciation | 0.6% | 1.1 | 0.6% | 1.1 | 0.6% | 1.0 |
Impact of increase in deferred tax rate | 1.0% | 1.7 | 0.9% | 1.7 | 2.3% | 3.4 |
Adjustment for prior years | (0.1%) | (0.2) | (0.1%) | (0.2) | (0.1%) | (0.2) |
Total income tax expense in income statement | 24.4% | 41.0 | 24.3% | 45.8 | 18.9% | 28.0 |
The rate of corporation tax increased from 19% to 25% from 1 April 2023. Therefore the 25% rate has been applied to any timing differences.
Tax recognised in other comprehensive income or directly in equity
| 2023 | 2023 | 2023 | 2022 | |
| Current tax | Deferred tax | Tota l | Total | |
| £m | £m | £m | £m | |
| Debit/(credit): | ||||
Relating to equity-settled transactions | – | 0.4 | 0.4 | 3.2 |
Relating to defined benefit pension plans – remeasurement losses | (0.3) | (0.1) | (0.4) | (1.8) |
(0.3) | 0.3 | – | 1.4 |
The deferred tax movements in both the current and prior years relating to equity-settled transactions are in respect of share-based payments and arise as a result of fluctuations in share price
in the year and the stage of maturity of existing schemes.
The current and deferred tax movements in both the current and prior years relating to defined benefit pension plans are in respect of plan remeasurements accounted for in other
comprehensive income, special contributions made to the scheme and the revaluation impact of deferred tax previously recognised directly in equity.
During 2023 legislation was enacted to implement the Organisation for Economic Co-operation and Development (‘OECD’) Base Erosion and Profit Shifting (‘BEPS’) Pillar Two income inclusion rule
(‘IIR’) in the UK, which will apply to accounting periods that begin on or after 31 December 2023. Although the Group has turnover in excess of the Pillar Two threshold, all trade is carried out through
a single UK-based trading company and so there are not expected to be any ‘top-up’ tax requirements arising from this new regime.
142
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
9. Earnings per share
Basic earnings per share
Basic earnings per share for the 52 weeks ended 30 December 2023 is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares
in issue during the 52 weeks ended 30 December 2023 as calculated below.
Diluted earnings per share
Diluted earnings per share for the 52 weeks ended 30 December 2023 is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares,
adjusted for the effects of all dilutive potential ordinary shares (which comprise share options granted to employees) in issue during the 52 weeks ended 30 December 2023 as calculated below.
Profit attributable to ordinary shareholders
| 2023 | 2023 | |||
| Excluding | Exceptional | |||
| exceptional | items | 2023 | ||
| items | (see Note 4) | Tota l | 2022 | |
| £m | £m | £m | £m | |
Profit for the financial year attributable to equity holders of the Parent | 126.7 | 15.8 | 142.5 | 120.3 |
Basic earnings per share | 125.0p | 15.6p | 140.6p | 118.5p |
Diluted earnings per share | 123.8p | 15.4p | 139.2p | 117.5p |
Weighted average number of ordinary shares
| 2023 | 2022 | |
| Number | Number | |
Issued ordinary shares at start of year | 102,112,581 | 101,897,021 |
Effect of own shares held | (879,975) | (511,370) |
Effect of shares issued | 86,106 | 100,009 |
Weighted average number of ordinary shares during the year | 101,318,712 | 101,485,660 |
Effect of share options in issue | 97 7,753 | 849,222 |
Weighted average number of ordinary shares (diluted) during the year | 102,296,465 | 102,334,882 |
143Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
| Assets under | |||
| Software | development | Total | |
| £m | £m | £m | |
| Cost | |||
Balance at 2 January 2022 | 36.3 | 0.7 | 37.0 |
Additions | 3.2 | 0.1 | 3.3 |
Transfers | 0.8 | (0.8) | – |
Balance at 31 December 2022 | 40.3 | – | 40.3 |
Balance at 1 January 2023 | 40.3 | – | 40.3 |
Additions | 3.1 | 5.6 | 8.7 |
Disposals | (1.7) | – | (1.7) |
Transfers | 0.3 | (0.3) | – |
Balance at 30 December 2023 | 42.0 | 5.3 | 47.3 |
| Amortisation | |||
Balance at 2 January 2022 | 22.1 | – | 22.1 |
Amortisation charge for the year | 4.7 | – | 4.7 |
Balance at 31 December 2022 | 26.8 | – | 26.8 |
Balance at 1 January 2023 | 26.8 | – | 26.8 |
Amortisation charge for the year | 3.9 | – | 3.9 |
Disposals | (1.7) | – | (1.7) |
Balance at 30 December 2023 | 29.0 | – | 29.0 |
| Carrying amounts | |||
At 2 January 2022 | 14.2 | 0.7 | 14.9 |
At 31 December 2022 | 13.5 | – | 13.5 |
At 1 January 2023 | 13.5 | – | 13.5 |
At 30 December 2023 | 13.0 | 5.3 | 18.3 |
144
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
11. Leases
Amounts recognised in the balance sheets
The balance sheets show the following amounts relating to leases:
Group and Parent Company
| 2023 | 2022 | |
| £m | £m | |
| Right-of-use assets | ||
Land and buildings | 292.3 | 278.4 |
Plant and equipment | 4.3 | 3.2 |
296.6 | 281.6 |
| 2023 | 2022 | |
| £m | £m | |
| Lease liabilities | ||
Current | 52.5 | 48.8 |
Non-current | 267.1 | 252.5 |
319.6 | 301.3 |
The remaining maturities of the lease liabilities, which are gross and undiscounted, are as follows:
| 2023 | 2022 | |
| £m | £m | |
Less than one year | 64.9 | 56.2 |
One to two years | 56.8 | 52.5 |
Two to three years | 49.9 | 47.7 |
Three to four years | 42.0 | 39.9 |
Four to five years | 34.5 | 32.4 |
Five to 20 years | 119.7 | 106.4 |
Total undiscounted lease liability | 367.8 | 335.1 |
Additions to right-of-use assets during the 52 weeks ended 30 December 2023 as a result of entering into new leases (either as a result of acquiring new shops or completing a lease renewal for
an existing shop) were £70.3 million (2022: £63.4 million).
A further net increase of £1.7 million to right-of-use assets has also been recognised during the 52 weeks ended 30 December 2023 as a result of lease modifications and assumptions relating
to lease term once a lease has become expired (2022: net increase of £7.8 million).
145Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Amounts recognised in the income statement
| 2023 | 2022 | |
| £m | £m | |
| Depreciation charge on right-of-use assets | ||
Land and buildings | 53.2 | 51.6 |
Plant and equipment | 1.3 | 1.2 |
54.5 | 52.8 | |
Impairment charge | 2.5 | 0.0 |
Interest expense (included in finance expense) | 9.6 | 6.8 |
Expense included for short-term leases (included in cost of sales and administrative expenses) | – | 0.1 |
Expense related to lease of low-value assets that are not shown above as short-term leases (included in administrative expenses) | 0.3 | 0.2 |
Expense related to variable lease payments not included in lease liabilities (included in distribution and selling costs) | 8.5 | 5.1 |
The impairment charge is charged to distribution and selling costs in the income statement and arises due to changes in the trading performance of the shops.
The total cash outflow for leases accounted for under IFRS 16 in 2023 was £63.3 million (2022: £59.5 million) and for other leases was £8.8 million (2022: £5.4 million).
The components of the movement in the total lease liability were as follows:
| 2023 | |
| £m | |
Opening total liability | 301.3 |
Additions in respect of new leases | 70.3 |
Lease modifications | 1.7 |
Interest on lease liabilities | 9.6 |
Rental payments (including interest paid on lease liabilities within operating activities) | (63.3) |
Closing total liability | 319.6 |
146
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
12. Property, plant and equipment
| Land and | Plant and | Fixtures | Assets under | ||
| buildings | equipment | and fittings | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 2 January 2022 | 190.7 | 183.2 | 363.8 | 2.8 | 740.5 |
Additions | 3.1 | 22.9 | 71.8 | 9.7 | 107.5 |
Disposals | (0.4) | (4.0) | (21.5) | – | (25.9) |
Transfers | 0.1 | 2.7 | – | (2.8) | – |
Balance at 31 December 2022 | 193.5 | 204.8 | 414.1 | 9.7 | 822.1 |
Balance at 1 January 2023 | 193.5 | 204.8 | 414.1 | 9.7 | 822.1 |
Additions | 0.3 | 25.5 | 107.3 | 58.0 | 191.1 |
Disposals | (2.2) | (8.9) | (47.9) | – | (59.0) |
Transfers | 0.5 | 0.4 | – | (0.9) | – |
Balance at 30 December 2023 | 192.1 | 221.8 | 473.5 | 66.8 | 954.2 |
| Depreciation | |||||
Balance at 2 January 2022 | 57.0 | 99.9 | 239.8 | – | 396.7 |
Depreciation charge for the year | 6.2 | 16.6 | 35.2 | – | 58.0 |
Impairment charge for the year | – | – | 2.0 | – | 2.0 |
Impairment release for the year | – | – | (0.8) | – | (0.8) |
Disposals | (0.3) | (3.5) | (20.0) | – | (23.8) |
Balance at 31 December 2022 | 62.9 | 113.0 | 256.2 | – | 432.1 |
Balance at 1 January 2023 | 62.9 | 113.0 | 256.2 | – | 432.1 |
Depreciation charge for the year | 6.5 | 18.5 | 41.6 | – | 66.6 |
Impairment charge for the year | – | – | 3.0 | – | 3.0 |
Impairment release for the year | – | – | (1.6) | – | (1.6) |
Disposals | (2.1) | (8.7) | (45.4) | – | (56.2) |
Balance at 30 December 2023 | 67.3 | 122.8 | 253.8 | – | 443.9 |
| Carrying amounts | |||||
At 2 January 2022 | 133.7 | 83.3 | 124.0 | 2.8 | 343.8 |
At 31 December 2022 | 130.6 | 91.8 | 157.9 | 9.7 | 390.0 |
At 1 January 2023 | 130.6 | 91.8 | 157.9 | 9.7 | 390.0 |
At 30 December 2023 | 124.8 | 99.0 | 219.7 | 66.8 | 510.3 |
147Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
During 2018, the Company exchanged contracts for the disposal of the vacant Twickenham site. The disposal is conditional on a number of factors, including the applications for and successful
grant of planning permission. As at the end of 2023 the timing of the resolution of these factors remains uncertain and therefore this asset continues to be classified as non-current. At this stage
the total proceeds arising from Supply Chain site disposals are still expected to be in line with those anticipated in the investment plan.
Parent Company
| Land and | Plant and | Fixtures | Assets under | ||
| buildings | equipment | and fittings | construction | Total | |
| £m | £m | £m | £m | £m | |
| Cost | |||||
Balance at 2 January 2022 | 191.2 | 183.7 | 364.3 | 2.8 | 742.0 |
Additions | 3.1 | 22.9 | 71.8 | 9.7 | 107.5 |
Disposals | (0.4) | (4.0) | (21.5) | – | (25.9) |
Transfers | 0.1 | 2.7 | – | (2.8) | – |
Balance at 31 December 2022 | 194.0 | 205.3 | 414.6 | 9.7 | 823.6 |
Balance at 1 January 2023 | 194.0 | 205.3 | 414.6 | 9.7 | 823.6 |
Additions | 0.3 | 25.5 | 107.3 | 58.0 | 191.1 |
Disposals | (2.2) | (8.9) | (47.9) | – | (59.0) |
Transfers | 0.5 | 0.4 | – | (0.9) | – |
Balance at 30 December 2023 | 192.6 | 222.3 | 474.0 | 66.8 | 955.7 |
| Depreciation | |||||
Balance at 2 January 2022 | 57.3 | 100.1 | 240.2 | – | 397.6 |
Depreciation charge for the year | 6.2 | 16.6 | 35.2 | – | 58.0 |
Impairment charge for the year | – | – | 2.0 | – | 2.0 |
Impairment release for the year | – | – | (0.8) | – | (0.8) |
Disposals | (0.3) | (3.5) | (20.0) | – | (23.8) |
Balance at 31 December 2022 | 63.2 | 113.2 | 256.6 | – | 433.0 |
Balance at 1 January 2023 | 63.2 | 113.2 | 256.6 | – | 433.0 |
Depreciation charge for the year | 6.5 | 18.5 | 41.6 | – | 66.6 |
Impairment charge for the year | – | – | 3.0 | – | 3.0 |
Impairment release for the year | – | – | (1.6) | – | (1.6) |
Disposals | (2.1) | (8.7) | (45.4) | – | (56.2) |
Balance at 31 December 2023 | 67.6 | 123.0 | 254.2 | – | 444.8 |
| Carrying amounts | |||||
At 2 January 2022 | 133.9 | 83.6 | 124.1 | 2.8 | 344.4 |
At 31 December 2022 | 130.8 | 92.1 | 158.0 | 9.7 | 390.6 |
At 1 January 2023 | 130.8 | 92.1 | 158.0 | 9.7 | 390.6 |
At 30 December 2023 | 125.0 | 99.3 | 219.8 | 66.8 | 510.9 |
148
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
12. Property, plant and equipment continued
Land and buildings
The carrying amount of land and buildings comprises:
Group | Parent Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Freehold land | 12.3 | 12.3 | 12.3 | 12.3 |
Freehold property | 111.8 | 117.3 | 112.0 | 117.5 |
Long leasehold property | 0.3 | 0.4 | 0.3 | 0.4 |
Short leasehold property | 0.4 | 0.6 | 0.4 | 0.6 |
124.8 | 130.6 | 125.0 | 130.8 |
| Shares in subsidiary | |
| undertakings | |
| £m | |
| Cost | |
Balance at 2 January 2022, 31 December 2022 and 30 December 2023 | 5.8 |
| Impairment | |
Balance at 2 January 2022, 31 December 2022 and 30 December 2023 | 0.8 |
| Carrying amount | |
Balance at 2 January 2022, 31 December 2022, 1 January 2023 and 30 December 2023 | 5.0 |
| Address of | Proportion of voting rights | ||
| Principal activity | registered office | and shares held | |
Charles Bragg (Bakers) Limited | Non-trading | 1 | 100% |
Greggs (Leasing) Limited | Dormant | 1 | 100% |
Thurston Parfitt Limited | Non-trading | 1 | 100% |
Greggs Properties Limited | Property holding | 1 | 100% |
Olivers (UK) Limited | Dormant | 2 | 100% |
Olivers (UK) Development Limited* | Non-trading | 2 | 100% |
Birketts Holdings Limited | Dormant | 1 | 100% |
J.R. Birkett and Sons Limited* | Non-trading | 1 | 100% |
Greggs Trustees Limited | Trustees | 1 | 100% |
Solstice Zone A Management Company Limited | Non-trading | 3 | 28% |
149Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Assets | Liabilities | Net | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | |
Property, plant and equipment | – | – | (61.5) | (33.2) | (61.5) | (33.2) |
Employee benefits | 4.8 | 4.9 | – | – | 4.8 | 4.9 |
Short-term temporary differences | 0.7 | 0.7 | – | – | 0.7 | 0.7 |
Unused tax losses | 1.3 | 1.3 | – | – | 1.3 | 1.3 |
Tax assets/(liabilities) | 6.8 | 6.9 | (61.5) | (33.2) | (54.7) | (26.3) |
| Balance at | Balance at | |||
| 2 January | Recognised | Recognised | 31 December | |
| 2022 | in income | in equity 2022 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | (18.5) | (14.7) | – | (33.2) |
Employee benefits | 6.6 | 0.5 | (2.2) | 4.9 |
Short-term temporary differences | 0.6 | 0.1 | – | 0.7 |
Unused tax losses | 1.3 | – | – | 1.3 |
(10.0) | (14.1) | (2.2) | (26.3) | |
| Balance at | Balance at | |||
| 1 January | Recognised | Recognised | 30 December | |
| 2023 | in income | in equity 2023 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | (33.2) | (28.3) | – | (61.5) |
Employee benefits | 4.9 | 0.2 | (0.3) | 4.8 |
Short-term temporary differences | 0.7 | – | – | 0.7 |
Unused tax losses | 1.3 | – | – | 1.3 |
(26.3) | (28.1) | (0.3) | (54.7) | |
150
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
14. Deferred tax assets and liabilities continued
Assets | Liabilities | Net | ||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | £m | £m | |
Property, plant and equipment | – | – | (60.9) | (32.6) | (60.9) | (32.6) |
Employee benefits | 4.8 | 4.9 | – | – | 4.8 | 4.9 |
Short-term temporary differences | 0.7 | 0.7 | – | – | 0.7 | 0.7 |
Unused tax losses | 1.3 | 1.3 | – | – | 1.3 | 1.3 |
Tax assets/(liabilities) | 6.8 | 6.9 | (60.9) | (32.6) | (54.1) | (25.7) |
| Balance at | Balance at | |||
| 2 January | Recognised | Recognised | 31 December | |
| 2022 | in income | in equity 2022 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | (17.9) | (14.7) | – | (32.6) |
Employee benefits | 6.6 | 0.5 | (2.2) | 4.9 |
Short-term temporary differences | 0.6 | 0.1 | – | 0.7 |
Unused tax losses | 1.3 | – | – | 1.3 |
(9.4) | (14.1) | (2.2) | (25.7) | |
| Balance at | Balance at | |||
| 1 January | Recognised | Recognised | 30 December | |
| 2023 | in income | in equity 2023 | ||
| £m | £m | £m | £m | |
Property, plant and equipment | (32.6) | (28.3) | – | (60.9) |
Employee benefits | 4.9 | 0.2 | (0.3) | 4.8 |
Short-term temporary differences | 0.7 | – | – | 0.7 |
Unused tax losses | 1.3 | – | – | 1.3 |
(25.7) | (28.1) | (0.3) | (54.1) | |
151Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
15. Inventories
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Raw materials and consumables | 31.8 | 23.7 |
Work in progress | 17.0 | 16.9 |
48.8 | 40.6 |
Inventory recognised as an expense during the year was £570.3 million (2022: £455.6 million). The write-down of inventories that was recognised as an expense in the period was £46.2 million
(2022: £32.8 million). There was no reversal of write-down of inventories in the current or prior year.
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Trade receivables | 33.3 | 31.2 |
Other receivables | 9.5 | 9.4 |
Prepayments | 11.0 | 9.6 |
53.8 | 50.2 |
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Not past due date | 29.8 | 29.2 |
Past due 1-30 days | 2.8 | 1.9 |
Past due 31-90 days | 0.5 | – |
Past due over 90 days | 0.2 | 0.1 |
33.3 | 31.2 |
152
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
17. Cash and cash equivalents
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Cash and cash equivalents | 195.3 | 191.6 |
Group | Parent Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Trade payables | 99.1 | 102.8 | 99.1 | 102.8 |
Amounts owed to subsidiary undertakings | – | – | 7.7 | 7.7 |
Other taxes and social security | 12.0 | 8.6 | 12.0 | 8.6 |
Other payables | 48.0 | 46.9 | 48.0 | 46.9 |
Accruals and deferred income | 45.3 | 28.3 | 45.3 | 28.3 |
Advance payments from customers | 6.2 | 4.6 | 6.2 | 4.6 |
Deferred government grants | 0.5 | 0.5 | 0.5 | 0.5 |
211.1 | 191.7 | 218.8 | 199.4 |
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Deferred government grants | 2.3 | 2.8 |
153Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
21. Employee benefits
154
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
21. Employee benefits continued
Defined benefit pension plan continued
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Defined benefit obligation | (82.8) | (82.5) |
Fair value of plan assets | 95.4 | 94.6 |
Net defined benefit pension surplus before IFRIC 14 adjustment | 12.6 | 12.1 |
IFRIC 14 adjustment | (6.0) | (5.8) |
Net defined benefit pension asset after IFRIC 14 adjustment | 6.6 | 6.3 |
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Opening defined benefit pension obligation | 82.5 | 132.5 |
Interest income | 3.8 | 2.4 |
| Remeasurement (gains)/losses: | ||
– changes in mortality assumptions | (1.9) | (0.7) |
– changes in financial assumptions | 1.9 | (53.3) |
– experience | 0.3 | 5.4 |
Benefits paid | (3.8) | (3.8) |
Closing defined benefit pension obligation | 82.8 | 82.5 |
| Group and Parent Company | ||
| 2023 | 2022 | |
| £m | £m | |
Opening fair value of plan assets | 94.6 | 135.5 |
Net interest on plan assets | 4.4 | 2.5 |
Remeasurement (losses)/gains | 0.2 | (47.6) |
Company special contribution | – | 8.0 |
Benefits paid | (3.8) | (3.8) |
Closing fair value of plan assets | 95.4 | 94.6 |
155Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
| Group | ||
| 2023 | 2022 | |
| £m | £m | |
Interest income on net defined pension liability | 0.6 | 0.1 |
Associated movement in IFRIC 14 adjustment | (0.3) | (0.1) |
Net interest income | 0.3 | – |
| Group | ||
| 2023 | 2022 | |
| £m | £m | |
Remeasurement (losses)/gains on defined benefit pension plans | (0.1) | 1.0 |
Associated movement in IFRIC 14 adjustment | 0.1 | (0.3) |
Net remeasurement gains on defined benefit pension plans | - | 0.7 |
| Group and Parent Company | |||
| 2023 | 2022 | ||
| £m | £m | ||
Equities | – UK | 4.0 | 8.8 |
– Overseas | 7.1 | 13.9 | |
Bonds | – Corporate | 29.1 | 23.2 |
– Government | 43.6 | 37.5 | |
Cash and cash equivalents/other | 11.6 | 11.2 | |
95.4 | 94.6 |
| Group and Parent Company | ||
2023 | 2022 | |
Discount rate | 4.55% | 4.75% |
Future salary increases | n/a | n/a |
Future pension increases | 1.95% - 2.55% 1.95% – 2.60% | |
Rate of price inflation (RPI) | 3.00% | 3.10% |
Rate of price inflation (CPI) | 2.60% | 2.60% |
156
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
21. Employee benefits continued
Defined benefit pension plan continued
Change in assumption | Impact on scheme liabilities | |
Discount rate | 0.5% decrease | Increase of £5.6m |
Inflation | 0.5% increase | Increase of £3.6m |
Mortality rates | 1 year increase | Decrease of £3.3m |
157Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
| Number of | ||||||
| Exercise | shares | Contractual | ||||
Date of grant | Employees entitled | price | granted | Vesting conditions | life | |
Executive Share Option Scheme 16 | March 2013 | Senior employees | £4.80 | 693,000 | Three years’ service and EPS growth of 3-7% over RPI on average over those | 10 years |
| three years | ||||||
Performance Share Plan 5 | March 2014 | Senior executives | £nil | 224,599 | Three years’ service, EPS annual compound growth of 1-4% over RPI over those | 10 years |
| three years and average annual ROCE of 15.5-17% over those three years | ||||||
Executive Share Option Scheme 17 | April 2014 | Senior employees | £5.00 | 598,225 | Three years’ service and EPS growth of 1-4% over RPI on average over those | 10 years |
| three years | ||||||
Executive Share Option Scheme 18 | March 2015 | Senior employees | £10.22 | 298,045 | Three years’ service and EPS growth of 1-7% over RPI on average over those | 10 years |
| three years | ||||||
Executive Share Option Scheme 18a | May 2015 | Senior employee | £10.56 | 3,285 | Three years’ service and EPS growth of 1-7% over RPI on average over those | 10 years |
| three years | ||||||
Performance Share Plan 6 | March 2015 | Senior executives | £nil | 146,174 | Three years’ service, EPS annual compound growth of 1-7% over RPI over those | 10 years |
| three years and average annual ROCE of 19-21.5% over those three years | ||||||
Performance Share Plan 7 | March 2016 | Senior executives | £nil | 133,271 | Three years’ service, EPS average annual growth of 2-8% over RPI over those | 10 years |
| three years and average annual ROCE of 22-27% over those three years | ||||||
Executive Share Option Scheme 19 | April 2016 | Senior employees | £10.88 | 235,857 | Three years’ service and EPS growth of 2-8% over RPI on average over those | 10 years |
| three years | ||||||
Performance Share Plan 8 | May 2017 | Senior executives | £nil | 206,404 | Three years’ service, EPS average annual growth of 5-11% over those | 10 years |
| three years and average annual ROCE of 23-27% over those three years | ||||||
Executive Share Option Scheme 20 | April 2017 | Senior employees | £10.33 | 246,219 | Three years’ service and EPS growth of 5-11% on average over those | 10 years |
| three years | ||||||
Performance Share Plan 9 | March 2018 | Senior executives | £nil | 190,943 | Three years’ service, EPS average annual growth of 5-11% over those | 10 years |
| three years and average annual ROCE of 25-29% over those three years | ||||||
Executive Share Option Scheme 21 | March 2018 | Senior employees | £11.97 | 228,923 | Three years’ service and EPS growth of 5-11% on average over those | 10 years |
| three years | ||||||
Performance Share Plan 10 | April 2019 | Senior executives | £nil | 128,534 | Three years’ service, EPS average annual growth of 5-11% over those | 10 years |
| three years and average annual ROCE of 24-28% over those three years | ||||||
Executive Share Option Scheme 22 | April 2019 | Senior employees | £18.30 | 140,913 | Three years’ service, EPS average annual growth of 5-11% over those | 10 years |
| three years and average annual ROCE of 24-28% over those three years | ||||||
Savings-Related Share Option Scheme 20 | April 2019 | All employees | £14.84 | 230,604 | Three years’ service | 3.5 years |
158
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
| Number of | |||||||
| Exercise | shares | Contractual | |||||
Date of grant | Employees entitled | price | granted | Vesting conditions | life | ||
Savings-Related Share Option Scheme 21 | April 2020 | All employees | £14.24 | 239,673 | Three years’ service | 3.5 years | |
Performance Share Plan 11 | October 2020 | Senior executives | £nil | 166,366 | Three years’ service, EPS performance in FY2022, ROCE performance | 10 years | |
| in FY2022 and two strategic objectives | |||||||
Executive Share Option Scheme 23 | November | Senior employees | £17.20 | 121,202 | Three years’ service, EPS performance in FY2022, ROCE performance | 10 years | |
| 2020 | in FY2022 and two strategic objectives | ||||||
Savings-Related Share Option Scheme 22 | April 2021 | All employees | £16.72 | 291,979 | Three years’ service | 3.5 years | |
Performance Share Plan 12 | April 2021 | Senior executives | £nil | 120,022 | Three years’ service, EPS performance in FY2023, ROCE performance | 10 years | |
| in FY2023 | |||||||
Performance Share Plan 12 (retained) | April 2021 | Senior executives | £nil | 29,512 | Three years’ service | 10 years | |
Executive Share Option Scheme 24 | April 2021 | Senior employees | £22.63 | 120,994 | Three years’ service, EPS performance in FY2023, ROCE performance | 10 years | |
| in FY2023 | |||||||
Savings-Related Share Option Scheme 23 | April 2022 | All employees | £19.68 | 265,209 | Three years’ service | 3.5 years | |
Performance Share Plan 13 | March 2022 | Senior executives | £nil | 91,305 | Three years’ service, EPS average annual growth of 3-8% over those | 10 years | |
| three years and average annual ROCE of 19.6-22.6% over those three years | |||||||
Performance Share Plan 13a | May 2022 | Senior executives | £nil | 36,014 | Three years’ service, EPS average annual growth of 3-8% over those | 10 years | |
| three years and average annual ROCE of 19.6-22.6% over those three years | |||||||
Executive Share Option Scheme 25 | March 2022 | Senior employees | £24.31 | 118,357 | Three years’ service, EPS average annual growth of 3-8% over those | 10 years | |
| three years and average annual ROCE of 19.6-22.6% over those three years | |||||||
Savings-Related Share Option Scheme 24 | May 23 | All employees | £21.06 | 268,478 | Three years’ service | 3.5 years | |
Performance Share Plan 14 | May 23 | Senior executives | £nil | 109,583 | Three years’ service, EPS average annual growth of 4-9% over those | 10 years | |
| three years, average annual ROCE of 18.7%-21.2% over those three years | |||||||
| and a CO | emissions reduction target | ||||||
| 2 | |||||||
Executive Share Option Scheme 26 | May 23 | Senior employees | £27.92 | 130,075 | Three years’ service, EPS average annual growth of 4-9% over those | 10 years | |
| three years, average annual ROCE of 18.7%-21.2% over those three years | |||||||
| and a CO | emissions reduction target | ||||||
| 2 | |||||||
21. Employee benefits continued
Share-based payments – Group and Parent Company continued
159Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
2023 | 2022 | |||
| Weighted | Weighted | |||
| average | Number of | average | Number of | |
| exercise price | options | exercise price | options | |
Outstanding at the beginning of the year | £11.84 | 1,819,739 | £9.57 | 1,973,101 |
Lapsed during the year | £13.88 | (207,148) | £6.04 | (391,775) |
Exercised during the year | £7.78 | (439,911) | £11.23 | (272,472) |
Granted during the year | £18.27 | 508,136 | £15.85 | 510,885 |
Outstanding at the end of the year | £14.60 | 1,680,816 | £11.84 | 1,819,739 |
Exercisable at the end of the year | £10.13 | 264,675 | £7.44 | 363,630 |
2023 | 2022 | ||||||
| Executive | Savings-Related | Executive | Savings-Related | ||||
| Performance | Share Option | Share Option | Performance | Performance | Share Option | Share Option | |
| Share Plan 14 | Scheme 26 | Scheme 24 | Share Plan 13 | Share Plan 13a | Scheme 25 | Scheme 23 | |
| May 2023 | May 2023 | May 2023 | March 2022 | May 2022 | March 2022 | April 2022 | |
Fair value at grant date | £25.91 | £7.48 | £10.92 | £23.34 | £20.04 | £ 7.64 | £8.33 |
Share price | £27.62 | £27.62 | £28.46 | £24.99 | £21.68 | £24.99 | £23.50 |
Exercise price | £nil | £27.92 | £21.06 | £nil | £nil | £24.31 | £19.68 |
Expected volatility | 40.11% | 40.11% | 40.52% | 48.75% | 48.29% | 48.75% | 49.00% |
Option life | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years | 3 years |
Expected dividend yield | 2.14% | 2.14% | 2.07% | 2.28% | 2.63% | 2.28% | 2.43% |
Risk-free rate | 4.05% | 4.05% | 3.82% | 1.38% | 1.50% | 1.38% | 1.64% |
160
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
21. Employee benefits continued
Share-based payments – Group and Parent Company continued
| 2023 | 2022 | |
| £m | £m | |
Share options granted in 2019 | – | 0.2 |
Share options granted in 2020 | 0.4 | 0.7 |
Share options granted in 2021 | 1.3 | 1.8 |
Share options granted in 2022 | 1.6 | 0.9 |
Share options granted in 2023 | 1.3 | – |
4.6 | 3.6 | |
Social security contributions | 0.4 | (0.3) |
Total expense recognised as employee costs | 5.0 | 3.3 |
| Group and Parent Company | ||||||||||
| 2023 | 2022 | |||||||||
| 2023 | National | 2023 | 2023 | 2023 | 2022 | National | 2022 | 2022 | 2022 | |
| Dilapidations | Insurance | Redundancy | Other | Tota l | Dilapidations | Insurance | Redundancy | Other | Total | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Balance at start of the year | 3.6 | 1.6 | 0.1 | 1.0 | 6.3 | 3.1 | 2.2 | 0.2 | 1.5 | 7.0 |
Additional provision in the year | 1.8 | 0.4 | – | 0.1 | 2.3 | 1.8 | – | – | – | 1.8 |
Utilised in the year | (0.7) | (0.7) | – | (0.1) | (1.5) | (0.3) | (0.3) | – | (0.2) | (0.8) |
Provisions reversed during the year | (0.6) | – | – | (0.3)* | (0.9) | (1.0) | (0.3) | (0.1) | (0.3) | (1.7) |
Balance at end of the year | 4.1 | 1.3 | 0.1 | 0.7 | 6.2 | 3.6 | 1.6 | 0.1 | 1.0 | 6.3 |
Included in current liabilities | 2.5 | 1.0 | – | 0.5 | 4.0 | 2.3 | 0.9 | – | 0.4 | 3.6 |
Included in non-current liabilities | 1.6 | 0.3 | 0.1 | 0.2 | 2.2 | 1.3 | 0.7 | 0.1 | 0.6 | 2.7 |
4.1 | 1.3 | 0.1 | 0.7 | 6.2 | 3.6 | 1.6 | 0.1 | 1.0 | 6.3 |
161Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
23. Capital and reserves
| Ordinary shares | ||
| 2023 | 2022 | |
| Number | Number | |
In issue and fully paid at start of year – ordinary shares of 2p | 102,112,581 | 101,897,021 |
Issued on exercise of share options | 143,094 | 215,560 |
102,255,675 | 102,112,581 |
| 2023 | 2022 | |
| Per share | Per share | |
| pence | pence | |
2021 special dividend | – | 40.0p |
2021 final dividend | – | 42.0p |
2022 interim dividend | – | 15.0p |
2022 final dividend | 44.0p | – |
2023 interim dividend | 16.0p | – |
60.0p | 97.0p |
162
NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED
23. Capital and reserves continued
Dividends continued
| 2023 | 2022 | |
| £m | £m | |
2021 special dividend | – | 40.6 |
2021 final dividend | – | 42.7 |
2022 interim dividend | – | 15.2 |
2022 final dividend | 44.6 | – |
2023 interim dividend | 16.2 | – |
60.8 | 98.5 |
Amounts owed to related parties | Amounts owed by related parties | |||
| 2023 | 2022 | 2023 | 2022 | |
| £m | £m | £m | £m | |
Dormant subsidiaries | 7.7 | 7.7 | – | – |
163Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
TEN-YEAR HISTORY
2014
(as
restated)
1,3
2015
1
2016 2017 2018 2019
5,7
2020
1
2021
1
2022 2023
Turnover (£m) 806.1 835.7 894.2 960.0 1,029.3 1,167.9 811.3 1,229.7 1,512.8 1,806.9
Total sales growth/(decline) (%) 5.7% 3.7% 7.0% 7.4% 7.2% 13.5% (30.5%) 51.6% 23.0% 19.6%
Company-managed shop like-for-like sales growth/(decline) (%) 4.5% 4.7% 4.2% 3.7% 2.9% 9.2% (36.2%) 52.4% 17.8% 13.7%
Profit/(loss) before tax (PBT) excluding exceptional items (£m) 58.3 73.1 80.3 81.7 89.8 114.2 (12.9) 145.6 148.3 167.7
PBT margin excluding exceptional items (%) 7.2% 8.7% 9.0% 8.5% 8.7% 9.8% (1.59%) 11.8% 9.8% 9.3%
Pre-tax exceptional charge (£m) (8.5) – (5.2) (9.9) (7.2) (5.9) (0.8) – – 20.6
Profit/(loss) on ordinary activities including exceptional items and before tax (£m) 49.7 73.0 75.1 71.9 82.6 108.3 (13.7) 145.6 148.3 188.3
Diluted earnings/(loss) per share excluding exceptional items (pence) 43.4 55.8 60.8 63.5 70.3 89.7 (12.9) 114.3 117.5 123.8
Dividend per share declared (pence) 22.0 48.6
4
31.0 32.3 35.7 46.9
6
– 97.0
8
59.0 102.0
8
Total shareholder return (%) 69.7% 87.1% (23.8%) 47.5% (7.4%) 87.5% (22.0%) 87.3% (27.9%) 13.6%
Capital expenditure (£m) 48.9 71.7 80.4 70.4 73.0 86.0 58.7 57.4 110.8 199.8
Return on capital employed (excluding exceptional items) (%) 22.4% 26.8% 28.1% 26.9% 27.4% 20.0% (2.4%) 23.0% 21.0% 21.1%
Number of shops in operation at year end 1,650 1,698 1,764 1,854 1,953 2,050 2,078 2,181 2,328 2,473
1 2014 and 2020 were 53 week years, impacting on total sales growth for that year and the year immediately following
2 Restated following the adoption of IAS 19 (Revised)
3 Restated to include revenue in respect of franchise fit-out costs
4 Includes a special dividend of 20.0 pence paid in 2015
5 IFRS 16 leases was implemented at the start of the financial year using the modified retrospective approach. Prior year comparatives have not been restated
6 Includes a special dividend of 35.0 pence. The final dividend declared in respect of 2019 was cancelled as a cash preservation measure during the Covid-19 crisis
7 Restated for a change in accounting policy relating to deferred tax
8 Includes a special dividend of 40.0 pence
All of the non-GAAP measures detailed above can be calculated from the GAAP measures included in the annual accounts with the exception of those detailed pages 164 and 165.
164
ALTERNATIVE PERFORMANCE MEASURES
Calculation of alternative performance measures
Like-for-like (‘LFL’) sales growth – compares year-on-year cash sales in our company-managed shops, with a calendar year’s trading history and is calculated as follows:
2023
£m
2022
£m
Current year LFL sales 1,444.3 1,239.8
Prior year LFL sales 1,270.0 1,052.2
Growth in LFL sales 174.3 187.6
LFL sales growth percentage 13.7% 17.8%
Return on capital employed – calculated by dividing profit before tax by the average total assets less current liabilities for the year.
2023
Underlying
£m
2023
Including
exceptional
items
(see Note 4)
£m
2022
£m
Profit before tax 167.7 188.3 148.3
Capital employed:
Opening 730.3 730.3 681.5
Closing 857.2 857.2 730.3
Average 793.8 793.8 705.8
Return on capital employed 21.1% 23.7% 21.0%
Net cash inflow from operating activities after lease payments – calculated by deducting the repayment of principal of lease liabilities from net cash flow from operating activities.
2023
£m
2022
£m
Net cash inflow from operating activities 310.8 251.5
Repayment of principle of lease liabilities (53.7) (52.7)
Net cash inflow from operating activities after lease payments 257.1 198.8
165Greggs plc Annual Report and Accounts 2023
ACCOUNTSDIRECTORS’ REPORTSTRATEGIC REPORT
Ratio of IFRS 16 ‘right of use’ charges on leased property assets to company-managed shop sales – calculated by dividing land and buildings right-of-use asset charges by company-managed
shop turnover.
2023
£m
2022
£m
Company-managed shop turnover (see Note 1) 1,610.9 1,352.3
Land and buildings right-of-use assets depreciation (see Note 10) 54.5 51.6
Land and buildings right-of-use assets interest charge (see Note 10) 9.6 6.8
Right-of-use asset charges 64.1 58.4
4.0% 4.3%
166
Secretary
Jonathan D Jowett, LL.M. Solicitor
Registered Office
Registered number
502851
Bankers
Barclays Bank plc
Barclays House
5 St Ann’s Street
Quayside
Newcastle upon Tyne
NE1 3DX
Auditor
RSM UK Audit LLP
1 St James’ Gate
Newcastle upon Tyne
NE1 4AD
Stockbrokers
UBS
5 Broadgate Circle
London
EC2M 2QS
Investec
2 Gresham Street
London
EC2V 7QP
Solicitors
Linklaters LLP
One Silk Street
London
EC2Y 8HQ
Registrars
Link Group
10th Floor
Central Square
28 Wellington Street
Leeds
LS1 4DL
SECRETARY AND ADVISERS
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