Greggs almost back to breakeven after virus blow

Sales at Greggs have almost recovered to breakeven levels following the lifting of the coronavirus lockdown, the snack foods retailer said on Tuesday after it reported a plunge to first-half losses.

The company said sales at company-managed stores stood at 72 per cent of the 2019 level in the most recent week. It added it could breakeven when sales reach about 80 per cent of last year’s level.

Chief executive Roger Whiteside said Greggs had made a great start to 2020 before the pandemic hit, causing it to close its more than 2,000 stores for most of the second quarter.

The company said its shops had re-opened by July, offering a limited range of its best-sellers to takeaway customers, and that it had brought about 75 per cent of staff back to work.

“Greggs is now well prepared to deal with the challenges of social distancing and operate through the conditions we are faced with,” Whiteside said.

The health crisis resulted in Greggs reporting a pretax loss of £65.2 million for the six months to June 27, against a profit of £36.7 million a year earlier.

Sales fell to £300.6 million from £546.3 million.

The company burned though £4.4 million a week during the lockdown, despite accessing government support to furlough staff and benefiting from business rate relief. It saw in total a cash outflow of £102.5 million in the second quarter.

The company issued £150 million pounds of bonds supported by a Bank of England facility to increase its liquidity, and said on Tuesday it was in talks with banking partners to access further medium-term financing.

It was also succeeding in negotiating rent reductions on its shops it said.