Greggs Optimistic it Can Avoid Job Losses

Greggs Optimistic it Can Avoid Job Losses
Greggs swings to £62m loss but is “optimistic” it can avoid job losses. Closure of chain’s 2,000-store network has massive impact on company but it says it is back to nearly 75% of normal sales.

Newcastle bakery chain Greggs swung to a loss in the first half of the year but says sales have returned to almost three-quarters of normal levels.

In half-year results, the food-on-the-go giant said that sales last week reached 72% of where they were during the same week last year, despite many sites and high streets opening up and down the country.

Greggs Optimistic it Can Avoid Job Losses

The bakery chain registered a £62.2m loss for the first six months of the year, compared to a profit of £36.7m last year. Sales were down 45% to £300.6m over the same period.

Chief executive Roger Whiteside said: “Following successive years of unbroken growth Greggs made a great start to 2020, coming into the year with momentum and clear strategic plans. “The strength of our business model enabled us to secure the liquidity needed to support our business through the current crisis and then to adapt our operation and strategic investment plans in response to the new environment.

“I want to thank the amazing team of people in our business who have risen to the challenges created by this crisis both in supporting the wider community and working together to redesign our operation to work safely under these new conditions.

“Greggs is now well prepared to deal with the challenges of social distancing and operate through the conditions we are faced with. Greggs remains a much-loved brand with long-term growth opportunities and the business is better placed to adapt to new conditions than ever before.”

In an interview on the BBC’s Today programme, Mr Whiteside said the company had managed to bring back 75% of its 25,000 staff, with the rest on furlough. He said he was optimistic that more workers could be brought back as the economy improved, but did not rule out the possibility of job losses.

The firm said it was is planning to launch click-and-collect and delivery services across the country to help increase sales.

Greggs reopened 800 of its shops for takeaways on June 18, while the rest of its stores began to gradually get back to work from July 2.

Bosses have slowed plans to open more shops – a key part of Greggs’ growth strategy. In the first six months the company closed 45 sites while opening only 20, and it expects to open around 60 and close 50 over the rest of the year.

There are 2,025 Greggs bakeries across the UK.

Julie Palmer, a partner at Begbies Traynor, said: “The success of Greggs has been the envy of the high street in recent years; however, even the bakery chain hasn’t been immune to the impact of Covid-19, which has forced its stores to close and eaten away at its top line.

“The company has now started reopening stores but, with new social distancing measures having to be implemented and a lack of footfall in town centres, the second half of the year will be an uphill battle.”

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