Greggs suspends new store plans due to "great uncertainty" in sales outlook

A baked goods retailer has reported today that it is suspending plans to open new stores across the country due to “great uncertainty” in sales outlook.

Greggs, based in Newcastle, announced in its update that plans to open new stores will be temporarily suspended, except where a legal obligation has already been made.

The food giant set out plans for reopening existing stores, with 800 locations set to open this Thursday (18 June), and the rest of the estate slated to be operational in early July.

It said that it anticipates lower than normal sales for “some time”, as capacity to operate will be restricted by shop sizes and social distancing measures.

This will mean a “proportion” of the company’s staff will remain on furlough for the foreseeable future, until sales levels return to normal.

However, Greggs has reaffirmed its commitment to investing in a new robotics frozen logistic facility in the North East, as well as accelerating the development of its digital sales platforms.

Greggs said: “During the closure period we have reviewed our immediate strategic priorities and made a number of key decisions while we continue to assess the longer-term implications of this crisis on our strategic planning.

“With uncertainty in the sales outlook we have temporarily suspended our new shop opening programme with the exception of a few shops where we are already legally committed or we anticipate strong customer traffic.

“As a result, we now expect to open c.60 shops and close c.50 over the year as a whole.

“We have reviewed our existing estate and are approaching landlords making a variety of proposals in return for rent reductions.

“With digital shopping channels becoming more important we have accelerated our development of ‘delivery’ and ‘click and collect’ services.

“Included in this week’s reopening plan are 19 shops that will re-open for ‘delivery’ and ‘click and collect’ transactions, and we will extend these services to further catchments as soon as possible.

“Finally, we have continued with the investment in our new robotic frozen logistics facility in the North East, which will significantly improve efficiency under all trading conditions.”

Roger Whiteside OBE, chief executive, commented: “Looking forward, although great uncertainty remains, we are excited to be resuming our service for many customers this week.

“We are confident of our ability to adapt to market conditions in the short term while continuing to invest in the long-term growth of our business. I want to thank all of our 25,000 colleagues for their support in getting us to this point.”