Greggs’ sales lag behind in UK’s big cities as full return to offices in doubt

Greggs, the food-to-go retailer, has said sales in big cities and offices are lagging behind even as the rest of its shop estate, particularly stores in transport hubs, have improved in recent weeks.

Like-for-like sales across the UK bakery chain’s 1,831 company-managed shops were up 27 per cent in the first 19 weeks of the year, compared with the same period in 2021, in part thanks to trading restrictions on shops in the first part of last year.

The UK bakery chain said on Monday it expected this growth to return to normal “as we compare to more robust trading periods in 2021” but added that “sales levels in larger cities and in office locations continue to lag the rest of the estate”.

Questions over whether white-collar workers will return in full numbers to offices five days a week have become more acute for businesses that relied on commuters as companies establish new patterns of working for employees.

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Shops

The group, which specialises in sausage rolls and other eat-on-the-go pastries, said in the 19 weeks to May 14th it had opened 49 new shops, mostly in retail parks. It also opened stores in Birmingham and Liverpool airports.

Total sales during the period were £495 million (€583 million), up 30 per cent compared with the same period in 2021. It warned that across the sector, costs were increasing and it was working to maintain its low prices as “consumer incomes will clearly be under pressure”.

Shares in the Newcastle-based group dropped nearly 3 per cent in early London trading, extending its fall for the year to 36 per cent. – Copyright The Financial Times Limited 2022