Greggs swings to loss but ‘encouraged’ by sales since reopening

The food-to-go specialist fell to a pre-tax loss of £65m during the 26 weeks to June 27, compared with a £37m profit the previous year. 

Sales dropped 45% to £301m across the six-month period, as like for likes halved in Greggs’ company-managed shops.

However, the business said it had been “encouraged” by trading patterns since it started reopening stores with social distancing measures in place. 

In the week ending July 25, Greggs said sales reached 72% of 2019 levels.

The group said that the “variety and geographical reach” of its store estate, coupled with the fact that it was “not materially dependent on office-based workers”, meant it had been “less impacted by social distancing than many” other retailers.

However, Greggs warned that it expects sales “to remain below normal for as long as social distancing is required”.

Around 20% of the retailer’s busiest shops, which require “above average” team sizes working in kitchens and behind counters, continue to operate below capacity under social distancing measures. 

Greggs said it will make continued use of the Coronavirus job retention scheme to support jobs while demand recovers. 

The business said that, although it was “unable to predict how long social distancing will be required”, it remained “confident of our potential for growth once this constraint is removed”.

Greggs boss Roger Whiteside said: “Following successive years of unbroken growth Greggs made a great start to 2020, coming into the year with momentum and clear strategic plans. The strength of our business model enabled us to secure the liquidity needed to support our business through the current crisis and then to adapt our operation and strategic investment plans in response to the new environment.

“I want to thank the amazing team of people in our business who have risen to the challenges created by this crisis both in supporting the wider community and working together to redesign our operation to work safely under these new conditions.

“Greggs is now well prepared to deal with the challenges of social distancing and operate through the conditions we are faced with.”