Greggs suffers first loss in 36 years: High street bakery chain reveals £13million loss during the coronavirus pandemic but still plans to open 100 stores in 2021
Sausage roll stalwart Greggs has sunk to its first loss in 36 years as the Covid-19 pandemic sliced £300million from the sales of one of Britain’s high street powerhouses.
Bosses at the bakery chain announced a pre-tax loss of £13.7 million in 2020, compared with a £108.3 million profit a year earlier, with sales dropping from £1.17 billion to £811.3 million as stores closed their doors for large swathes of the year.
But the company said it remains positive for the future and has committed to opening 100 new stores this year.
Delivery services and a partnership with Just Eat helped offset some of the falls, the company said, with 9.6% of total sales in the first ten weeks of 2021 now coming via deliveries.
But the latest lockdowns and restrictions since the start of the year have hit overall sales, the company said, with like-for-like sales down 28.8% in the ten weeks to March 13.
Greggs has made its first loss since the 1980s but has committed to opening 100 new stores this year
Stores have remained open for takeaways, as they are classed as essential retailers, however city centre locations and travel hub sites have seen substantial falls due to the stay-at-home Government orders.
Excluding sales in Scotland, where stores have been closed to walk-in customers for the majority of the year, like-for-like sales were down 22.4% during the period.
The company said the results for 2020 were slightly better than expected, considering the lockdowns, adding that it benefited from the furlough scheme and business rates holiday.
Bosses added they have access to a new £100 million revolving credit facility to fund further expansion beyond the 2,078 stores in operation.
Greggs listed on the London Stock Exchange in 1984 and had never previously reported a loss since becoming a public company.
An employee wearing PPE including a mask and visor serves at the counter of a Greggs bakery in London, whose sales dropped by £300million in the pandemic
It came as Thorntons yesterday said it will close its shops, marking the end of the confectioner’s 110-year history on the High Street in the face of growing upmarket competition and online shopping,
All 61 stores are to shut, its Italian owners Ferrero said, putting up to 603 jobs at risk.
Thorntons was founded in 1911 by travelling confectioner Joseph William Thornton, who opened a single sweet shop in Sheffield with his 14-year-old son Norman.
The firm enjoyed a decades-long heyday before being forced to join the stock exchange in 1987 after a family feud led to chairman Peter Thornton being ousted by his brother and cousins.
The company’s financial problems started in the early 2000s as it faced fierce competition from luxury rivals such as Green & Black’s, Hotel Chocolat and Lindt.
Thorntons’ sale in 2015 to Ferrero for £112million marked the loss of one of Britain’s last remaining home-grown chocolate companies to an overseas buyer. Ferrero said it was ‘committed to this iconic British brand’ and that its factory in Alfreton ‘remains key’. The news came as figures showed big chains shut 17,500 shops on the High Street last year.