Greggs to retain business rates relief despite surge in profits

THE boss of Greggs has rejected pressure to repay business rates relief, saying such a move would be “illogical” even as profits rebound to surpass prepandemic levels.

Roger Whiteside said the company had “nothing to repay”, arguing that the relief had simply allowed it to pay a lower level of tax rather than the company being handed cash.

Greggs was among those to benefit from business rates relief, which the Government brought in during the pandemic in an attempt to protect high street retailers.

The bakery chain received £13m of rates relief in the past six months and £18.8m during the previous year.

Others including Sainsbury’s, Tesco, Asda and Aldi have paid back the relief after sales and profits came in stronger than expected.

Mr Whiteside said Greggs would not be following their lead. “We repaid what we claimed. We claimed furlough this year so we paid back around £5m or £6m. We’re giving back any money that was given to us, but tax relief, that’s not money that’s been given to us.

“It’s just a temporary lower tax rate that we have paid. It doesn’t make any sense that you would choose to pay any more than it – it’s just an illogical argument. We’ve got no plans to volunteer to pay a higher tax rate than the going rate.” Meanwhile, Greggs said it had experienced a boost from home deliveries in its first half, with hundreds of its stores now offering the option.

It said home delivery made up 8.5pc of sales from company-managed shops in the first six months of the year. Delivery is now available from almost 850 stores through Just Eat. Greggs opened 48 new stores in the first six months of the year and closed 11 others to take its estate to 2,115 shops.

It expected to open 100 net new shops this year.

The chain posted pre-tax profit of £55.5m for the six months to July 3, bouncing back from a £65.2m loss last year and better than the £36.7m profit for the same period in 2019.

The improvement is despite total sales coming in marginally lower than pre-pandemic levels at £546.2m, with like-for-like sales down 9.2pc on the same period in 2019.

Greggs expected annual profits to be ahead its earlier guidance despite “general uncertainties in the market” such as inflationary pressure.

Separately, pizza chain Domino’s also said it was experiencing “general inflationary pressure” and could not rule out price rises.

Pre-tax profits for Domino’s more than doubled in the first half to £41.3m on revenue 12.5pc higher, buoyed by a spike in deliveries during the Euros football tournament.