 came out on Monday and said its profit levels could reach its pre-pandemic levels as its sales have rebounded.){kind=link}
Greggs’ trading statement will “put a smile on the retail sector”
Greggs (LON:GRG) came out on Monday and said its profit levels could reach its pre-pandemic levels as its sales have rebounded.
The UK baker said it has experienced a “strong recovery” as non-essential shops reopened in April.
“If Next’s recent trading statement didn’t put a smile on the retail sector, then Greggs’ certainly will,” said AJ Bell investment director Russ Mould.
The company’s trading statement conceded that while the present moment was an unusual period of trading, it could lead to the company outperforming its profit forecast.
“The reopening of non-essential retail has got people out of the house and Greggs has benefited from increased traffic and temporarily reduced competition from cafes and restaurants,” Mould added.
“A greater number of people returning to the office will also have helped, as workers nip out at lunchtime for a sandwich and a coffee.”
Back in March, Greggs revealed its first full year loss in nearly 40 years as its sales dived due to the Covid-19 outbreak. At that point the baker suggested it would not get back to its pre-pandemic levels until at least 2022.
According to its most recent update Greggs “saw a significant pick up in sales with the reopening of non-essential retail from 12 April, in part reflecting the pent-up demand for retail which has boosted High Street footfall”.
“Now it is betting on a big recovery in pre-pandemic activity once considered ‘normal’, namely going to work in an office, meeting friends and family for social activities, and more movement via personal and public transport around the country. Its stores are conveniently placed to attract people as they go about their day,” Mould argues.
“Many people think we’re going to see structural change in where work is done, however we are still creatures of habit and it wouldn’t be surprising to see queues return to Greggs’ stores for bacon baguettes, sausage rolls and steak bakes slowly build up as more Government restrictions are lifted and companies lay down their long-term working strategies. Even with some people working full time from home, the nation isn’t going to hide away like it did in 2020.”