UK baker Greggs expects sales recovery to lift annual profit By Reuters

© Reuters. Social distancing guidelines are seen outside a Greggs bakery shop, as it reopens following the outbreak of the coronavirus disease (COVID-19), in Newcastle-under-Lyme, Staffordshire, Britain June 18, 2020. REUTERS/Carl Recine/Files

(Reuters) – British bakery and fast-food chain Greggs said on Monday sales recovery was stronger than anticipated, adding that a sustained recovery from the COVID-19 pandemic could boost its annual profit.

Its shares rose 3% to 2,632 pence in early trading after the company said like-for-like sales in shops managed by Greggs were up between 1% and 3% in recent weeks compared to the same period in 2019.

“Since (the easing of restrictions on non-essential retail) we had expected to see increased competition as cafes and restaurants were allowed to compete more effectively with our largely take-out offer,” the company said in a statement.

However, Greggs warned that pent-up demand had reduced.

While the company’s shops have been able to stay open through the COVID-19 pandemic, the crisis has disrupted its business model which relies on a high volume of customer visits.

Last month, London-listed Greggs raised its profit outlook, despite like-for-like sales in the eight weeks to May 8 falling 3.9%. Previously, the company had said it did not expect profit to return to pre-pandemic levels until 2022 at least.

The company, best known for its sausage rolls, steak bakes and vegan snacks, is set to report its interim results on Aug. 3.

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