British baker and fast food retailer Greggs has reported its first annual loss, after the COVID-19 pandemic hammered shopper numbers.
Greggs, best known for its sausage rolls, steak bakes and vegan snacks, reported a pretax loss of £13.7 million (€15.9 million), having posted a record profit of £108.3 million in 2019. Total sales fell 31% to £811 million (€940.7 million).
A year ago Greggs, which trades from over 2,000 UK outlets, could do no wrong and its shares hit a record high.
But then the pandemic hit, shattering its business model which relies on a high volume of shop visits.
While Greggs' shares lost a quarter of their value in 2020, they are up 23% so far in 2021 on hopes the rapid vaccination roll-out and an easing of restrictions will see trade bounce back.
'Better Than Expected'
The group said it had made a better-than-expected start to 2021 given the extent of lockdown conditions.
While like-for-like sales in company managed shops were down 36.2% year-on-year in 2020, they have recovered to be down 28.8% in the ten weeks to March 13.
That figure improves to down 22.4% if Scotland, where shops have been closed to walk-in customers for the majority of the year to date, is excluded.
Greggs also said delivery sales were particularly strong, representing 9.6% of sales in the ten week period.
"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," commented Roger Whiteside, chief executive.
"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."
Elsewhere, Greggs has raised its UK stores target to 3,000 from 2,500 previously, believing it is well positioned for growth once the COVID-19 pandemic passes.
"We declared our new target of 3,000 shops for the UK because we can see there's plenty of opportunities outside of high streets," Whiteside told Reuters.