The coronavirus pandemic has pushed Greggs into its first annual loss since the bakery chain floated on the stock market 37 years ago, but the company will push ahead with plans to open 100 new shops this year.
The company, known for its sausage rolls and steak bakes, posted a pretax loss of £13.7m in 2020, compared with a profit of £108m the year before, as like-for-like sales fell 36%. It was its first annual loss since it floated on the London Stock Exchange in 1984.
Like other high street businesses, Greggs has been hit hard by the pandemic, and announced in November plans to cut 820 jobs. It shut its branches for three months during the first Covid-19 lockdown a year ago, and has lost takeaway trade from commuters, shoppers and those on the school run.
However, the new year has started better than expected given the latest lockdown, Greggs said. Like-for-like sales – those in shops open for more than a year – were down 29% in the 10 weeks to 13 March.
Roger Whiteside, the Greggs chief executive, said: “We have seen an improving trend each week with delivery sales being particularly strong in these conditions.” Greggs offers delivery from 600 outlets, which will rise to 800 this year, after it struck a partnership with Just Eat. It is testing a dinner menu for home delivery.
The improving sales trend has given Greggs, which has 2,078 shops, the confidence to ramp up openings this year. It plans 100 new shops, up from 28 net last year, after store closures are deducted. Its new target is to get to 3,000 outlets eventually, rather than 2,500.
It is opening shops that can be accessed easily by car – drive-throughs and outlets in retail parks – as these have been the strongest performers during the Covid-19 crisis, while shops near offices have performed poorly as companies ordered most of their staff to work from home. But Greggs also sees opportunities in central London and at mass transport hubs.
The company introduced a click and collect service at all shops in September, improved its loyalty scheme and is piloting a new app before its launch in the April to June quarter.
After the success of its vegan sausage roll, Greggs, which was founded by John Gregg in 1939, introduced a vegan steak bake and vegan doughnut last year, and is planning more vegan versions of its bestsellers. Sales of home baking products leapt to record levels last year.
Greggs shares were up 4% on Tuesday morning, after the results were announced.