Greggs will pay out a £7m windfall to 25,000 staff at the end of this month after a “phenomenal year” that included the highly publicised launch of the new plant-based snack.
Around 19,000 employees who joined Greggs before last April will get £300 each, while the remaining 6,000 will be paid £75 per quarter they have worked for the company.
Greggs said the one-off payment was “in recognition of their crucial contribution to business success”.
The runaway success of Greggs’ vegan sausage roll was one of the biggest PR triumphs of last year. A lively debate on social media, which included Piers Morgan labelling the bakery chain “PC-ravaged clowns”, ensured the new product was a hit.
Greggs will no doubt be hoping that the new meat-free steak bake, launched last week, also becomes a customer favourite.
While the vegan launches have generated huge interest from consumers, Greggs’ fortunes have been buoyed by a broader strategy of transforming itself from a traditional bakery into a more modern food-to-go chain, offering a range of products including salads and coffee.
Like-for-like sales jumped 9.2 per cent in 2019, Greggs revealed as it upgraded its profit guidance for the third time in two months. The announcement comes after shareholders banked a £35m special dividend in October thanks to the company’s better-than-expected performance.
Underlying pre-tax profit for the year will still be ahead of expectations even after the £7m staff bonus, Greggs said.
“I am delighted to announce that we will also be making a special additional payment to all of our colleagues across the business who have worked so hard to deliver this success in what has been a phenomenal year,” chief executive Roger Whiteside said on Wednesday.
Greggs added close to 100 new stores last year, taking its total to 2,050, and has another 100 openings planned for this year.
Sales grew 13.5 per cent, almost double the pace of last year. Like-for-like sales, which strip out the effect of shop openings and closures, were up 9.2 per cent.
“Looking to the year ahead, we face strong sales comparatives and cost inflation headwinds present a challenge,” Mr Whiteside said.
Like many retailers on UK high streets, Greggs will have to grapple with an increase in the minimum wage. The company also warned that the rapidly rising cost of pork – thanks in part to an epidemic of swine fever in China – could have an impact on business.
Greggs said in October that it was stockpiling ingredients, including pork, to prepare for the potential impact of Brexit.
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