British bakery retailer Greggs has said that its sales recovery has been stronger than anticipated following the easing of coronavirus restrictions, adding that if the recovery continues it could positively impact profit for the year.
In a trading update, the company said in recent weeks, like-for-like sales in the stores managed by Greggs were up between 1% and 3% compared to the same period in 2019. However, it warned that pent-up demand had reduced.
'Greggs last reported trading performance on 10 May, at which point we had seen a strong recovery in sales levels following the easing of restrictions on non-essential retail across the UK,' the company said. 'Since then we had expected to see increased competition as cafes and restaurants were allowed to compete more effectively with our largely take-out offer.
'This level of sustained sales recovery is stronger than we had anticipated.'
The company, which operates more than 2,000 retail outlets throughout the UK, plans to provide an 'updated picture' in its forthcoming interim results, which will be published on 3 August.
Last month, London-listed Greggs raised its profit outlook, despite like-for-like sales in the eight weeks to May 8 falling 3.9%. Previously, the company had said it did not expect profit to return to pre-pandemic levels until 2022 at least.
Commenting on its performance, analyst Russ Mould of AJ Bell said, “Whereas some retail businesses only a temporary surge in sales as lockdown restrictions eased, thanks to pent-up demand, Greggs appears to have been able to sustain decent sales growth even after that initial flurry of activity across the retail sector in April.
“Greggs was cautious when the company last updated and it’s interesting to see management not shouting from the rooftops despite better-than-expected trading. That’s the correct stance to take, as there is still a lot of uncertainty across the UK. It also isn’t clear how much of the commuter trade will return as so many companies still haven’t decided on their new working location strategies.”
Recent Board Changes
Earlier this month, Greggs announced the appointment of Mohamed Elsarky as an independent non-executive director on its board, with the former Kelloggs and Danone executive joining the baker's Audit, Remuneration, and Nominations Committees.
Elsarky "brings with him extensive international food manufacturing and supply chain experience gained within businesses owning significant consumer brands," Ian Durant, Greggs' chairman said at the time.
The company also announced that Peter McPhillips will retire as an independent non-executive director on 31 July.