There was some good news for the foodservice supply chain this morning as Greggs said it would restart its shop opening programme.
The company suspended new projects back in June in a bid to minimise the fallout of the Covid-pandemic, but it has now reversed that decision following a pick-up in business during August and September.
So far this year the bakery chain has closed more stores than it has opened – 49 versus 38 – but that is set to change in the coming months.
“With greater clarity on activity levels we have reactivated elements of our shop opening pipeline and now expect to open net 20 shops in 2020, predominantly in locations accessed by car,” the company stated.
Greggs currently operates 2,039 shops, comprising 1,720 company-managed units and 319 franchised units.
The firm said it had faced a “challenging and volatile environment”, but activity levels have increased in recent weeks.
Since reopening its full estate on 2 July, like-for-like sales in company-managed shops have averaged 71% of the 2019 level in the three months to 26 September.
In the most recent four weeks to 26 September, like-for-like sales in company-managed shops have averaged 76% of the 2019 level, in line with its planning assumptions at this stage.
Greggs was unable to participate in the government’s ‘Eat Out to Help Out’ scheme due to the closure of seated areas within its stores, while high temperatures also made August a difficult month for the business.
Increased out-of-home activity in September appears to have driven a recovery in customer visits, however.
“In response to this we are bringing back more of our product range, including a broader sandwich range and classic favourites such as Belgian buns. In addition, 100 of our larger shops have now reopened their customer seating with appropriate social distancing in place,” the company said.
Greggs’ digital offer is developing quickly, benefiting from increased investment during the lockdown period.
Its Click & Collect service is now available in all shops, allowing customers to pre-order and pay ahead of visiting to collect their order.
The roll-out of its national delivery offer, in partnership with Just Eat, is also progressing at speed.
In the most recent week to 26 September, delivery represented almost 3% of company-managed shop sales.
Greggs warned that it is “taking steps to ensure that our employment costs reflect the estimated level of demand from November onwards” as the Job Retention Scheme comes to a close.
It said that likely changes in demand meant it needed to be as productive and flexible as it could to protect as many jobs as possible for the long term.
It is now proposing a series of changes which are the subject of a collective consultation with union and employee representatives.
The company said its aim is to minimise the risk of job losses by negotiating reduced hours in its shops and it will update on the outcome of the consultation when concluded.