Greggs, the bakery-cum-café chain, said that it had to write down £9m worth of stock due to lockdown and has warned that it will not return to previous trading levels while social distancing is required.
The Newcastle-based company said on Tuesday that trading had reached 72 per cent of 2019 levels in the week to the end of July 25, but that in the busiest 20 per cent of its shops, particularly smaller sites and those in travel locations, it could not employ full teams.
Takeaway food businesses were allowed to stay open during lockdown but Greggs said that it found its efforts to remain open initially “inconsistent with the ‘stay at home’ phase of lockdown”.
The company reopened stores on a trial basis in early May, after fears that an over enthusiastic reaction to its opening on Twitter would cause a stampede at stores.
It said that after £69m support from the government’s job retention scheme, business rate relief and an £150m state-backed corporate loan, weekly cash burn during lockdown was £4.4m. It had to write off £9m worth of unused stock and took a £1.3m impairment for 14 shops that it said would continue to trade but were unlikely to make a full recovery to historic sales levels. It said it expected to use another £20m to £25m of furlough relief from the government before the end of October.
Sales in the six months to the end of June were £300m, down 45 per cent compared to the same period in 2019.
Roger Whiteside, Gregg’s chief executive, said that it was “very difficult” to predict the outlook for the business but that Greggs was “now well prepared to deal with the challenges of social distancing and operate through the conditions we are faced with”.