Greggs appears well set for expansion after a sustained recovery in sales as coronavirus restrictions have eased.
The British bakery and fast-food chain made £55.5m in pre-tax profit in the first half of 2021, compared to a pre-tax loss of £64.5m in the same period last year. Total sales amounted to £546.2m.
The increase in footfall since non-essential shops reopened resulted in a 2.8 per cent growth for the second quarter compared to the same period in 2019.
“We continue to make good progress with our strategic priorities, growing the shop estate and investing in our digital capabilities to compete in all channels and dayparts of our market,” said Greggs chief executive Roger Whiteside.
“Whilst 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.”
Shareholders will receive an interim ordinary dividend of 15p per share, the first dividend paid since October 2019.
Known for steak bakes and sausage rolls, Greggs will be expanding its offering of vegan-friendly products and cater for more dietary variety as part of its menu development strategy.
“Greggs is bringing home the bacon again with our appetite for sausage rolls and sweet treats becoming insatiable once more,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.
“Keeping up with changing tastes, as health concerns rise will also be a challenge for a company famous for carb and sugar heavy treats. Expanding its meat free range is part of the strategy, with a vegan version of its sausage, bean and cheese melt likely to bring a little extra sauce to sales in the coming months.”
So far this year, Greggs has opened 48 new shops around the country and closed down 11. The company anticipates the opening of around 100 new shops in 2021, creating 500 new retail roles in the second half of the year. The chain currently operates 2,115 shops, of which 343 are franchises.
Delivery is now available in 837 of Greggs shops. Delivery sales represented 8.5 per cent in revenue of company-managed shops in the 26 weeks to July 3rd. Greggs has partnered with online food order and delivery service Just Eat as part of its strategy to grow the delivery channel.
“Greggs has been able to punch above its weight in food-to-go because it has had less restriction exposure, and it sells the value products cost-conscious first-returners desire,” said Ross Hindle, an analyst at market researcher Third Bridge.