UK coffee and food-to-go chain anticipates full-year losses of up to £15m and forecasts profits will not recover until 2022 – but presses ahead with plans to open 100 net new stores in 2021
Greggs opened 28 net new stores in 2020 and plans to open a further 100 net new stores in 2021 | Photo credit: Greggs
UK food-focused coffee chain Greggs recorded full-year sales of £811m ($1.1bn) for the 53 weeks ending 2 January 2021, down from £1.17bn in 2019. In a stark illustration of how Covid-19 has adversely impacted UK coffee shops, Greggs is forecasting a £15m loss compared to pre-tax profits of £114.2m in 2019.
Nevertheless, the loss is significantly smaller than the £67m forecast by analysts and the £65.2m half-year loss posted by Greggs in June 2020.
"Whilst the impact of Covid-19 has been enormous, we have established working practices that allow us to provide takeaway food services under the different levels of restrictions we have experienced. The breadth of Greggs' customer base provides ongoing demand for our services which, combined with our diverse geographical spread, has demonstrated the resilience of our business,” said Greggs Chief Executive Roger Whiteside.
Like many UK coffee chains, Greggs has sought to offset store closures by diversifying into delivery and harnessing an existing retail partnership with supermarket chain, Iceland.
In the final quarter of the year, Greggs said delivery represented 5.5% of company-managed shop sales, with its Just East partnership currently available from 600 locations and expected to increase to 800 stores during 2021.
Despite the severe market turbulence, Greggs still managed to open net 28 new stores for a total of 2,078, although 820 redundancies were made in 2020. The chain said its ‘robust’ financial position would enable it focus on the development of its digital sales channels and open around 100 net new stores in 2021.