Greggs warns profits will not recover until at least 2022

Greggs warns profits will not recover until at least 2022
Greggs said Covid-19 restrictions will keep profits under pressure for another year at least.
// Greggs braced for annual pre-tax losses of up to £15m, against profits of £108.3m last year
// Total sales for the year slumped by nearly a third – 31% – to £811m

Greggs has forecast a swing to a full-year loss and warned profits will not recover until at least 2022 as the Covid pandemic hammers sales.

The high street bakery chain – which recently axed 820 jobs – said like-for-like sales fell by nearly a fifth over its fourth quarter to January 2, running at 81 per cent of year-earlier levels.

Meanwhile in its third quarter sales were down as much as 29 per cent year-on-year.


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Greggs said total sales for the year slumped by nearly a third – 31 per cent – to £811 million.

The bakery chain said it was braced for annual pre-tax losses of up to £15 million, against profits of £108.3 million the previous year, although it said the hit was contained thanks to government support.

It said Covid-19 restrictions, which this week has made the whole of the UK under lockdown for the first time since last spring, will keep profits under pressure for another year at least.

“The significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance,” Greggs said.

“However, we do not expect that profits will return to pre-Covid levels until 2022 at the earliest.”

Despite the update, shares in Greggs lifted eight per cent as the expected losses were lower than feared and thanks to improving sales.

Greggs also sought to shore up trade by launching a delivery tie-up with Just Eat, which it said accounted for 5.5 per cent of fourth quarter sales.

It said 600 of its shops now provide delivery services to catchments served by Just Eat and this is expected to increase to around 800 shops in 2021.

The high street chain also confirmed it still hopes to open around 100 new stores, on a net basis, over the year ahead.

“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,” chief executive Roger Whiteside said.

“We have resumed opening new shops where we see good opportunities, with those sites accessed by car performing particularly well.”

with PA Wires

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