Sausage roll purveyor Greggs has sunk to its first loss in 36 years as the Covid-19 pandemic hit one of the stalwarts of the high street.
Bosses at the chain announced a pre-tax loss of £13.7 million in 2020, compared with a £108.3 million profit a year earlier, with sales dropping from £1.17 billion to £811.3 million as stores closed their doors for large swathes of the year.
The latest lockdowns and restrictions since the start of the year have hit overall sales, the company added, with like-for-like sales down 28.8% in the 10 weeks to March 13.
Excluding sales in Scotland, where stores have been closed to walk-in customers for the majority of the year, like-for-like sales were down 22.4% during the period.
But the company said it remains positive for the future and has committed to opening 100 new stores this year.
Chief executive Roger Whiteside also revealed a new target to have 3,000 Greggs stores across the UK, up from the 2,078 sites already in operation.
He told the PA news agency: “There are 13,000 retail parks in the United Kingdom – we’re got a Greggs in 100 of them.
“There are 8,000 petrol stations – we’ve got a Greggs in 224.
“There are 2,000 large supermarkets in the United Kingdom run by the top three brands – we’re in 13.
“So we think there are plenty of new opportunities.”
Greggs also aims to open between eight and 10 drive-thrus each year, although Mr Whiteside admitted opening them is harder because of the unique specifications needed for each site.
He explained: “We are actively pursuing every drive thru we can find, but so is everybody else so they’re very competitive to get a hold of.”
But the majority of new stores will be in areas where Greggs is under-represented and could also include locations that would have previously been too expensive as working patterns shift, leading to rents falling.
Mr Whiteside said: “Transport hub rents are already falling so we’re seeing opportunities arriving in those locations for us to enter.
“The competitive landscape will weaken considerably, a lot of areas will go to the wall and new space is already becoming available with rents falling rapidly.
“Those are the areas Gregg’s will start entering.”
The boss added that delivery services and a partnership with Just Eat helped offset some of the falls with 9.6% of total sales in the first 10 weeks of 2021 now coming via deliveries.
Growth through delivery will also come via more evening deliveries, with plans underway for a further hot food options.
Mr Whiteside said: “What’s really interesting about delivery for us is that allows us to compete in the evening.
“But that means you need more hot food choices.
“So one of the things that we’ve been experimenting with is how we offer more in the evening.
“The best example we’ve got is our pizza slices.
“We probably sell more pizza slices than anybody else in the UK, because other people other people sell whole pizzas and we sell slices of pizza.”
He added that during the Covid-19 pandemic, the company reverted to only offering best-selling lines, but innovation will return, following on from successful launches of its vegan steak bakes and doughnuts.
The chief said: “We see the move towards plant based alternative food as being a long term trend that is here to stay and therefore there will be more vegan versions of best-selling lines that we launched through the course of this year.”
Coffee sales are also expected to grow, with more vegan milk alternatives set to be launched in stores later this year.
The company said the results for 2020 were slightly better than expected, considering the lockdowns, adding that it benefited from the furlough scheme and business rates holiday.
Bosses added they have access to a new £100 million revolving credit facility to fund further expansion beyond the 2,078 stores in operation.
Greggs listed on the London Stock Exchange in 1984 and had never previously reported a loss since becoming a public company.