Greggs said like-for-like sales over the period rose 6.4% as it continues to benefit from a wider range of healthy eating options, such as salads and yoghurts.
During 2016, like-for-like sales were up 4.2% and the group said Christmas trading was boosted by a festive bake, mince pies and burritos.
Total sales rose 7% over 2016 and Greggs now anticipates full-year results to come in “slightly ahead” of previous expectations.
Chief executive Roger Whiteside hailed the performance but warned of “industry headwinds” in 2017, such as rising costs.
He told the Press Association: “We can see already that real income growth is slowing as inflation takes hold in the market, putting pressure on discretionary spending. It’s uncertain how the consumer will respond.
“We’re a value-led brand, so we will resist price increases as much as possible, but we do expect an impact on margins.”
The FTSE 250 company said its Balanced Choice menu continues to prove popular and it will soon be extending its hot drinks range to include vanilla latte alongside Fairtrade peppermint tea and green tea.
Greggs aims to open around 70 new stores this year and is also trialling a delivery service to cater for the office market in the City of London.
Mr Whiteside added: “In the year ahead, whilst we will undoubtedly see a number of well-documented industry headwinds, we are confident we will continue to make progress with the implementation of our strategic plan, including significant investment in our capability to supply a growing shop estate.”