Greggs faces first loss as the pandemic bites

HIGH street bakery chain Greggs, which has a number of outlets across Derbyshire, has warned it expects tao post the first ever loss in its history due to the coronavirus pandemic and will not see profits recover until at least 2022.

The Newcastle-based group – which recently axed more than 800 jobs amid the crisis – said it is braced for annual pre-tax losses of up to £15 million, against profits of £108.3 million the previous year. It will mark the first loss since it was founded more than 80 years ago and comes after sales have been hammered by the pandemic and lockdowns across the UK.

Greggs – which has 2,078 shops – saw like-for-like sales fall by nearly a fifth over its fourth quarter to January 2, running at 81% of yearearlier levels. It said total sales for the year slumped by nearly a third – 31% – to £811 million. It said Covid-19 restrictions, which have seen England placed in a nationwide lockdown for the third time, will keep profits under pressure for another year at least.

Greggs said: “The significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance. However, we do not expect that profits will return to pre-Covid levels until 2022 at the earliest.”

Greggs has sought to shore up trade by launching a delivery tie-up with Just Eat, which it said accounted for 5.5% 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 group, which was founded in 1939, is drawing up a new menu to boost delivery demand, including a range that would appeal more in the evening. The group also confirmed it still hopes to open around 100 new stores, on a net basis, over the year ahead.