Greggs has returned to profit after sales bounced back above pre-pandemic levels, as the bakery chain looks to hire 500 new staff and expand its network of shops.
Greggs, known for its sausage rolls, steak bakes and vegan snacks, reported a £55.5m pretax profit in the 26 weeks to 3 July. The company, which has raised its profit guidance for the year and reinstated its dividend on the back of the strong performance, reported a £65.2m loss in the same period last year.
The company said sales in the second quarter of the year were 2.8% higher than in the same period in 2019, after the reopening of non-essential retail outlets that led to more shoppers returning to high streets.
In the four weeks to 31 July, like-for-like sales were 0.4% higher than in July 2019, it added.
Like-for-like sales in the first half of the year were down 9.2% on the same period in 2019, with the lockdown earlier this year hitting takings.
“Greggs once again showed its resilience in a challenging first half, emerging from the lockdown months in a strong position and rebuilding sales as social restrictions were progressively relaxed,” said the Greggs chief executive, Roger Whiteside. “While there continue to be general uncertainties in the market, given our recent performance we now expect full-year profit to be slightly ahead of our previous expectation.”
Greggs said it opened 48 new stores in the first half, while closing 11, and is on track to add 100 outlets overall this year with 70% of its recent openings in “car-accessed locations” such as roadsides, petrol stations, retail parks and supermarkets. The company is looking to expand its overall estate from about 2,100 outlets to 3,000.
Outlets in public transport hubs and large city centres continue to lag those in high streets and suburbs as customers remain closer to home.
The company, which cut about 800 jobs last year, said it was looking to hire 500 staff in the second half of this year.
Greggs said it had repaid all money taken from the coronavirus job retention scheme in the first half of the year. It is reviewing whether to repay the total of £90m it has received from the government during the pandemic.
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In May, Greggs, which last year reported its first loss since 1984, said its annual profit could reach 2019’s record level of £108m.
John Moore, a senior investment manager at Brewin Dolphin, said Greggs’ results showed its underlying strength as a business.
“The company is feeling the full effect of a ‘return to normal’ along with the benefits of its investment in digital and the adaptations made to its estate to accommodate new customer habits during lockdown,” he said.