In its first trading update since announcing a deal to sell the majority of its UK business, the petrol station forecourt operator outlined strong revenue and profit growth for its foodservice brands, which includes UK chains LEON and Cooplands alongside licensed Starbucks, Greggs and Cinnabon stores
EG Group currently owns UK coffee and food-to-go chain LEON and bakery café chain Cooplands | Photo credit: EG Group
EG Group has reported growth in Foodservice revenue and profits in its first quarter of 2023, despite the group sales falling amid fluctuating petrol prices.
The petrol station forecourt operator said group sales fell 5% year-on-year in the three months ended 31 March 2023 to reach $7.2bn.
However, Foodservice sales grew 15%, primarily driven by EG Group’s recent investment in the channel, while gross profit for the division increased 10% to reach $192m.
Lancashire-based EG Group counts coffee and food-to-go chain LEON and UK bakery café chain Cooplands among its brands, and also licenses stores of Starbucks, Greggs and Cinnabon. The group has opened 88 new foodservice outlets since March 2022.
“In Q1 we delivered another robust set of results, with strong performances in most regions and significant growth in Foodservice gross profit, which was up 10% on the prior year,” said Zuber Issa, co-founder and co-CEO of EG Group.
EG Group also provided a strategy update following its £2.27bn ($2.8bn) deal to sell the majority of its UK and Ireland fuel, foodservice, grocery and merchandise business to UK supermarket giant Asda.
The petrol station forecourt operator said it will continue to invest in foodservice outlets across the UK, including leveraging its Cooplands bakery business. However, the transaction, expected to complete in the fourth quarter of 2023, will see Asda assume ownership of 80-store LEON.
In an indication of EG Group’s shifting focus to the US, the update outlined ‘a clear opportunity’ to continue expanding its Cumberland Farms convenience store chain, including the roll out of the brand's ‘leading coffee, private label proposition'.
EG Group achieved 25% revenue growth in 2022 to reach $33bn.