North East bakery chain Greggs says its expansion plans will continue in 2021 with 100 planned openings – despite warning profit levels will not recover until at least next year.
The group said average like-for-like sales were back up to 81.1% of its 2019 levels over its fourth quarter, running to January 2. It took in total sales of £293m compared to 2019’s £344m, and over the last five weeks had recovered to 85.7% of last year’s performance.
The Newcastle firm – which cut 820 jobs because of the impact of the pandemic – said total sales for the 53 weeks to Jan 2 slumped by 30.5% from £1.168bn to £811m, but added that Government support had helped limit full-year pre-tax losses.
Despite the falling sales, Greggs continued to grow its estate over the year, opening 84 new shops - including 35 franchised units - and closing 56, growing the estate to 2,078 shops as of January 2.
It said while there was “significant uncertainty” over the outlook due to ongoing lockdowns and Covid-19 measures, it was not expecting profits to recover to pre-pandemic levels for another two years “at the earliest”.
Looking ahead, the company said it was maintaining a strong financial position, developing new ways for customers to shop and that it expected to open 100 stores in the year ahead “subject to prevailing market conditions”.
Chief Executive Roger Whiteside said: “In a year like no other I am enormously proud of the way in which our team has risen to the challenges we have faced, whilst looking after the interests of all stakeholders and providing support for communities.
“Whilst the impact of COVID-19 has been enormous, we have established working practices that allow us to provide takeaway food services under the different levels of restrictions we have experienced. The breadth of Greggs’ customer base provides ongoing demand for our services which, combined with our diverse geographical spread, has demonstrated the resilience of our business.
“With customers spending more time at home we have successfully developed our partnership with Just Eat to offer delivery services and have also seen strong sales through our longstanding partnership with Iceland, offering our products for home baking. We have resumed opening new shops where we see good opportunities, with those sites accessed by car performing particularly well.
“In light of the recent Government announcements significant uncertainties remain in the near-term. We have taken action to position Greggs to withstand further short-term shocks and are optimistic about our prospects for growth once social restrictions are lifted.”
