Bakery chain Greggs has said that sales are bouncing back faster than it expected following the easing of restrictions since April.
Sales for the year are anticipated to be stronger than it thought following a positive recovery in out-of-home activity levels, albeit in the absence of competition from indoor seated catering operators.
And although it cautioned that considerable uncertainty remains, the chain is predicting that profits for the year could be around 2019 levels, materially higher than the board’s previous expectation.
The firm said costs have been well-controlled and the rate of cost inflation it is experiencing remains in line with its plans for the year.
Total sales in the 18 weeks to 8 May 2021 reached £352m compared to £280m last year, and were down just 4% on the same period two years ago.
Delivery sales continue to contribute positively to performance, representing 8% of company-managed shop sales in the most recent eight weeks and available through 800 shops.
Greggs stated: “The current trading environment is clearly highly unusual, making it difficult to predict how sales will develop. In the coming weeks, the governmet’s roadmap is likely to lead to further relaxation of restrictions and we will see increased competition as cafes and restaurants are able to compete more effectively with our largely take-out offer.
“Nonetheless we are pleased with the progress that we have made so far this year in both the walk-in and delivery channels.”
In the first 18 weeks of 2021, Greggs opened 34 new shops, including 13 with franchise partners.
The emphasis of the company’s estate expansion continues to be in those locations where performance has proved to be most robust, such as retail parks, roadside and petrol filling stations.
In the year to date it closed 11 shops, giving a total of 2,101 shops trading at 8 May.