Shares in food-to-go seller Greggs (GRG) gained 2.9% to £17.00 after the firm announced it would reopen 800 of its stores from this Thursday for takeaway customers.
Greggs is the UK’s biggest convenience food retailer, with more than 2,050 outlets throughout the country, but it had to close its entire estate on 24 March due to lockdown depriving it of almost three months' worth of sales.
WELCOME RETURN
The firm has been operating a small number of shops over the last few weeks, testing various operational changes under social distancing measures, and the trials have gone down well with staff and customers.
From this Thursday it plans to reopen 800 stores to takeaway customers, with the rest of its estate set to open next month.
The company admits it can’t forecast the impact of social distancing or the level of customer demand, and the size of shop will also be a factor in determining sales, but it expects turnover to be lower than normal ‘for some time.’
Therefore it is limiting its initial product range to its best sellers, meaning some of its manufacturing staff will remain furloughed until demand justifies adding more product lines.
STRATEGIC CHANGES
Given the uncertainty over sales, the firm has suspended its new shop opening programme for the time being with the exception of sites where it was already legally committed or it sees there being strong demand. It now expects to open around 60 new stores and to close around 50 existing stores.
However, with more people shopping digitally during lockdown, Greggs has beefed up its online offering and selected stores will be able to provide delivery and ‘click and collect’ services from this week. The firm then hopes to roll these services out to new areas as quickly as possible.
Chief executive Roger Whiteside admitted he was ‘excited’ about the reopening plan and ‘confident of Greggs’ ability to adapt to market conditions in the short terms while continuing to invest in the long-term growth of the business.’
