The global petrol station forecourt operator, which operates Leon and Cooplands, as well as licensed outlets of Starbucks, Cinnabon and Greggs, has highlighted the strong performance of its foodservice operations in the first quarter of 2022, with gross profit increasing 54% year-on-year
EG Group's foodservice achieved year-on-year profit growth of 54% in the first quarter of 2022 | Photo credit: EG Group
UK-based EG Group has said its foodservice offering represents the biggest opportunity for the company globally, as first quarter 2022 results show the channel achieved year-on-year profit growth of 54%.
EG Group currently operates more than 6,500 petrol station sites globally, including 700 in the UK and Ireland, with licensed branches of prominent brands such as
Starbucks, Cinnabon and
Greggs.
The company acquired UK-based food-to-go and coffee chain
Leon in April 2021 for $139m and bakery and café chain
Cooplands in October 2021.
The company cited the rollout of new foodservice sites as providing momentum for its financial performance, with 26 new outlets in the first three months of the year helping EG Group post gross profit from foodservice of $175m, compared to $114m for the same period in 2021. Profits from foodservice operations were 20% higher on a like-for-like basis.
EG Group has opened 21 of the new foodservice outlets in the UK and Ireland, including an unspecified number of new Cinnabon stores. The company, which is controlled by billionaire entrepreneurs Zuber and Mohsin Issa, announced plans in late 2020 to open
150 Cinnabon stores at petrol stations in the UK as part of a new partnership with the US bakery chain.
Total revenues increased to $6.91bn in the three months to 31 March 2022 from $5.52bn in the previous year. Although profits from fuel increased to $481m, EG Group cautioned that increased market volatility due to rising inflation and the war in Ukraine would likely continue to reduce gross profit margins moving forward.
“The strong performance in foodservice was supported by UK acquisitions from 2021 that contributed $40m of gross profit across the quarter, while the business continues to benefit from ongoing investment and the rollout of new sites, including our proprietary brands and partnerships with franchise partners. This momentum only serves to underline our belief that foodservice represents the biggest opportunity for EG Group globally,” said Zuber Issa, co-CEO of EG Group.