29th Sep 2020 09:03
(Alliance News) - Greggs PLC on Tuesday said it bounced back from a "slower August" but warned of a job losses to cut costs as the UK government's furlough scheme draws to a close.
In September, like-for-like sales in company-managed shops improved to 76% of the level seen in 2019. Greggs explained it saw "higher levels of activity" compared to a "slower August".
Since it re-merged from the Covid-19 lockdown in July, like-for-like sales in company-managed shops have on average sat at 71% of 2019 levels.
"These results have been achieved despite a number of headwinds. With our seated offer closed we were not in a position to participate in the government's 'Eat Out to Help Out' scheme and this, along with high temperatures made August a difficult month. Increased out-of-home activity in September appears to have driven a recovery in customer visits. In response to this we are bringing back more of our product range, including a broader sandwich range and classic favourites such as Belgian buns," Greggs said.
The company added that 100 of its larger sites have reopened customer seating, albeit with social distancing measures in place.
Greggs plans roughly 20 net new site openings in 2020. In the 39 weeks to September 26, it closed 49 shops and opened 38.
"With greater clarity on activity levels we have reactivated elements of our shop opening pipeline and now expect to open a net 20 shops in 2020, predominantly in locations accessed by car," the company said.
But although new store openings are planned, Greggs still warned that it may cut some jobs.
Greggs explained: "With the job retention scheme planned to end in October we are taking steps to ensure that our employment costs reflect the estimated level of demand from November onwards. With business activity levels remaining below normal for the foreseeable future we must change the way we work to be as productive and flexible as we can in order to protect as many jobs as possible for the long term.
"We have completed a review of our activity and requirements in every part of the business and are now proposing a series of changes which are the subject of a collective consultation with union and employee representatives. Our aim is to minimise the risk of job losses by negotiating reduced hours in our shops and we will update on the outcome of the consultation when concluded."
Greggs was trading 2.6% lower at 1,187.00 pence each in London on Tuesday morning.
By Eric Cunha; [email protected]
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