Greggs to open 100 new shops in 2021
Greggs (LON:GRG) reported its first loss in 36 years during 2020 as sales dropped by a third following nationwide lockdown measures.
The board of the Newcastle-based company confirmed a pre-tax loss of £13.7m in 2020 with sales dropping from £1.17bn in 2019 to £811.3m.
Greggs also said that the beginning of 2021 had been challenging for the baker. Over the same 10 week period in 2019, before lockdowns came into full affect, sales are down by 28.8%.
While the company does not expect too see a return to profit until 2022, it has committed to opening 100 new stores this year.
Ross Hindle, Analyst at Third Bridge, commented on the bakery’s resilience, while outlining concerns for the company beyond lockdowns.
“Greggs is more resilient than many of its food-on-the-go competitors. The Group has deeper pockets than most of its peers and with only 1 in 8 stores in city centres, Greggs hasn’t been burnt by lockdown in the same way as businesses like Pret a Manger have.”
“But Greggs does face a more existential crisis. The big question is how compatible Greggs will be with the UK’s post-lockdown preferences for frugality and healthier eating. Just as Covid has changed how we use tech’, so months at home have reframed how many of us think about what we eat and spend. Whether vegan sausage rolls tempt consumers into old habits, or we begin to baulk at costly coffees, only time will tell.”
Greggs’ share price jumped by 4.71% on early Tuesday morning trading to 2,314p per share.
Roger Whiteside OBE, chief executive of Greggs, commented on the bakery’s results and outlook:
“Greggs has made a better-than-expected start to 2021 given the extent of lockdown conditions and is well placed to participate in the recovery from the pandemic. It has a clear strategy to extend its digital capabilities and to grow further in new locations, channels and dayparts. These opportunities will benefit all of its stakeholders in the years to come.
“In a year like no other I believe that the Covid crisis has in many ways demonstrated the strength of Greggs. It has shown the resilience of our business model, but most of all the strength of our people who have worked hard throughout to maintain an essential service providing takeaway food to customers unable to work from home, many of whom were themselves key workers. I would like to take this opportunity to thank all of our people, who can be proud of the part we played in our nation’s time of need.”
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