Half a dozen new Greggs stores will open up in zones one and two in central London, including in the City of London, after falling rents in the capital made London spaces more attractive.
Greggs reported its first annual loss today since listing on the stock exchange in 1984, after coronavirus restrictions forced store closures and hampered footfall in towns and cities.
The bakery made a pre-tax loss of £13.7m in the year to 2 January 2020, having made a record profit of £108.3m in 2019. Total sales fell 31 per cent to £811m.
But the loss has not dampened the chain’s ambitions. The bakery is planning to open 100 more stores this year across the country.
According to Greggs CEO Roger Whiteside, falling rents in the capital, along with more retail spaces becoming available, has made London a more attractive option for the bakery, famous for its sausage rolls and pastries.
He said the chain planned to open “half a dozen” stores in zones one and two, including in the City of London.
Whiteside would not comment specifically on where the new London stores would open up, but said “obvious railway stations” were being considered.
“The thing about London is that we’re underrepresented,” said the CEO. “We’re lucky in that we’re not already in London and therefore suffering from high rent rates.”
Whiteside said Greggs would not be deterred by theoretically lower footfall in the capital post-coronavirus, adding: “Lower footfall in London is still more footfall than anywhere else on the planet.”
Greggs opened two units in St Pancras early last year. He said if the station was even half as busy as it was pre-coronavirus, those units would still be two of the busiest Greggs stores.
Ross Hindle, an analyst at Third Bridge, said Greggs had fared better than its competitors during the pandemic, but that changes adopted by people during the lockdown might pose an issue for the business.
“Greggs is more resilient than many of its food-on-the-go competitors. The group has deeper pockets than most of its peers and with only 1 in 8 stores in city centres, Greggs hasn’t been burnt by lockdown in the same way as businesses like Pret a Manger have,” he said.
“But Greggs does face a more existential crisis. The big question is how compatible Greggs will be with the UK’s post-lockdown preferences for frugality and healthier eating. Just as Covid has changed how we use tech, so months at home have reframed how many of us think about what we eat and spend. Whether vegan sausage rolls tempt consumers into old habits, or we begin to baulk at costly coffees, only time will tell.”