Greggs eyes return to pre-pandemic profits

Fast food chain Greggs believes it could get back to normal profits this year, as the business performed well during the first few weeks after non-essential retailers reopened.

The sausage roll maker said its sales had risen compared with 2019 since clothes shops and others resumed trading on April 12.

It did not reveal the exact increase in sales for that period, but said that in the eight weeks to May 8 sales dropped just 3.9%.

This compares with a 23.3% fall in the 10 weeks to March 13, the business said on Monday.

Although it warned of “considerable uncertainty”, the board seemed upbeat about Greggs’ prospects for the year.

It said profits could return to the levels seen in 2019 this year if Covid-19 restrictions continue to be eased as expected.

“Sales have recovered well in recent weeks as out-of-home activity levels have increased, albeit in the absence of competition from indoor seated catering operators,” Greggs told investors in an update on Monday morning.

“If restrictions continue to ease in line with current plans then we now expect our overall sales performance for the year to be stronger than we had previously anticipated.”

It added that “profits are likely to be materially higher than its previous expectation, and could be around 2019 levels in the absence of further restrictions”.

Total sales in the 18 weeks to May 8 were £352 million, up from £280 million last year as the pandemic weighed, but down from £373 million in 2019.

As for many food outlets, Greggs has been helped by deliveries during lockdowns. Customers are now able to order from 800 Greggs across the country and deliveries made up 8.2% of sales at the shops that Greggs directly manages.

However this is still less than half of Greggs’ 2,101 shops that were trading on May 8. Around 340 of these are franchises. Greggs said it opened 34 shops in the first 18 weeks of 2021.