The UK’s largest bakery chain Greggs (LON:GRG) announced that on Thursday, it would be expanding the number of its site reopening for takeaway services to 800, alongside publishing the rest of its provisional plan of action.
The company said that recent trials of gradual shop reopenings had been successful. Their trials included operational changes such as new work-wear, equipment and social distancing measures, which the company said would ensure the safety of its staff and customers as it continued with phased reopening.
Greggs continued by posting a bare-bones version of its reopening plan, which enclosed:
- Trial of reopening a small number of outlets with new measures in place – Early May.
- Larger scale reopening of selected shops with new procedures and equipment – Mid-June.
- Opening of remaining outlets – Early July.
In response to the existing social distancing situation, the company’s outlook was more reserved. Its statement read:
“We are not able to predict the impact of social distancing on our ability to trade or on customer demand. However, our capacity to operate will be restricted by size of shop and we must anticipate that sales may be lower than normal for some time.”
“This will require us to maintain a proportion of our colleagues on furlough, either fully or partially, until sales levels begin returning to normal. In anticipation of lower sales, we have limited our initial product range to our best sellers and therefore a number of our manufacturing operational teams will remain furloughed until demand reaches a level that justifies the addition of remaining product lines.”
It added that across its 2,009 outlets, its staff would be trained in new safety and hygiene procedures, including; floor markings and signage, protective screens at counters, protective work-wear, more frequent cleaning, hand sanitiser availability and encouragement of contactless card payments.
Strategically, the company said that it had suspended its shop opening programme (with the exception of legally binding arrangements), and in turn it would open 60 shops and close 50 during the full-year.
It continued, stating that it planned to accelerate the development of its delivery and click-and-collect transactions , and would continue to invest in its robotic frozen logistics facility in the North East.
Commenting on the update, Greggs Chief Executive Roger Whiteside OBE, commented,
“Looking forward, although great uncertainty remains, we are excited to be resuming our service for many customers this week. We are confident of our ability to adapt to market conditions in the short term while continuing to invest in the long-term growth of our business. I want to thank all of our 25,000 colleagues for their support in getting us to this point.”
Following the positive update, the company’s shares bounced by an impressive 6.65% or 109.92p to 1,761.92p per share 16/06/20 11:27 BST. The consensus target price for the stock, among brokers, sits at around 2,100p per share. The company’s p/e ratio is 18.15, its dividend yield stands at 1.88%.
