Greggs bounces back 'exceptionally' after shoppers return to the high street
Greggs’ sales recovery has been stronger than expected following the easing of lockdown restrictions despite the reopening of cafes and restaurants.
The fast food and bakery chain told investors that if the momentum was sustained, it would have a “materially positive impact” on its financial results for the year.
In May, bosses noted that the business had performed well during the first couple of weeks after non-essential retailers reopened.
The chain, which has more than 2,000 stores across the UK, said its sales had risen compared with 2019 since clothing shops and other retailers resumed trading, generating additional high street footfall.
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In its latest trading update, the firm noted: “Greggs last reported trading performance on May 10, at which point we had seen a strong recovery in sales levels following the easing of restrictions on non-essential retail across the UK.
“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.
“In recent weeks the impact of pent-up demand for retail has reduced but, nonetheless, like-for-like sales growth in company-managed shops has remained in positive territory ranging between 1 and 3 per cent when measured against the same period in 2019.”
It added: “This level of sustained sales recovery is stronger than we had anticipated and, if it were to continue, would have a materially positive impact on the expected financial result for the year.”
The firm is due to provide further details when it releases its interim results at the start of August.
Analysts at brokerage Shore Capital said: “Greggs has bounced back exceptionally well it should be said, and has showed itself to be very much a loved brand by shoppers, and so considerable resilience.
“The brand does still have to face into that full re-opening competition whilst costs in [the financial year] are likely to include a greater level of business rates, albeit sales comparatives and the expansion of the business should support margin.”
In May’s update, Greggs said profits could return to the levels seen in 2019 this year if Covid-19 restrictions continue to be eased as expected.