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Tue 29th Sep 2020 - Greggs reports trade in September is 76.1% of 2019 levels
Greggs reports trade in September is 76.1% of 2019 levels: Greggs has reported that September company-managed shop like-for-like sales improved to 76.1% of 2019 level in the four weeks to 26 September 2020. The company stated: “Our teams have worked hard to deliver high operational standards in a challenging and volatile environment. We saw activity levels increase as we came into September, following a more challenging month in August. Since reopening our full estate on 2 July like-for-like sales in company-managed shops have averaged 71.2% of the 2019 level in the 12 weeks to 26 September. In the most recent four weeks to 26 September like-for-like sales in company-managed shops have averaged 76.1% of the 2019 level, in line with our planning assumptions at this stage.These results have been achieved despite a number of headwinds. With our seated offer closed we were not in a position to participate in the government’s ‘Eat Out to Help Out’ scheme and this, along with high temperatures made August a difficult month. Increased out-of-home activity in September appears to have driven a recovery in customer visits. In response to this we are bringing back more of our product range, including a broader sandwich range and classic favourites such as Belgian buns. In addition, 100 of our larger shops have now reopened their customer seating with appropriate social distancing in place. Our digital offer is developing quickly, benefiting from increased investment during the lockdown period. Our Click & Collect offer is now available in all shops, allowing customers to pre-order and pay ahead of visiting to collect their order. The rollout of our national delivery offer, in partnership with Just Eat, is progressing at speed and we are seeing encouraging participation levels. In the most recent week to 26 September delivery represented 2.6% of company-managed shop sales. In the 39 weeks to 26 September 2020 we have opened 38 new shops and closed 49 shops, giving a total of 2,039 shops (comprising 1,720 company-managed shops and 319 franchised units). With greater clarity on activity levels we have reactivated elements of our shop opening pipeline and now expect to open a net 20 shops in 2020, predominantly in locations accessed by car. In response to increasing demand we have progressively reintroduced products into our range and have now reopened all of our manufacturing operations. In doing so we remain vigilant and the safety of our employees is our top priority. In August our supply chain team dealt with a small covid-19 occurrence at our distribution centre in Leeds and worked closely with Leeds City Council and Public Health England to handle the situation swiftly and professionally. There was some impact to product availability in the region over a five-day period but this was minimised through support from other sites in the network. In the past week we experienced a further occurrence at one of our manufacturing centres in Newcastle upon Tyne. As a precaution this production operation was temporarily closed, although stock distribution is unaffected. It seems likely that this pattern of disruption to supply-side operations will be an ongoing challenge as we prioritise employee safety and play our part in managing covid-related risks. We are making good progress with the construction of our new automated frozen logistics facility in the North East. The building work is complete and internal plant is now being installed. We remain on track to commission the new facility in the second quarter of 2021. With the Job Retention Scheme planned to end in October we are taking steps to ensure that our employment costs reflect the estimated level of demand from November onwards. With business activity levels remaining below normal for the foreseeable future we must change the way we work to be as productive and flexible as we can in order to protect as many jobs as possible for the long term. We have completed a review of our activity and requirements in every part of the business and are now proposing a series of changes which are the subject of a collective consultation with union and employee representatives. Our aim is to minimise the risk of job losses by negotiating reduced hours in our shops and we will update on the outcome of the consultation when concluded. Our cash position has strengthened following the resumption of trading in July. We continue to pay rents monthly in advance and are up to date on these and all other payables. Including CCFF borrowings and short-term deposits, Greggs returned to a positive net cash position during September. The outlook for trading remains uncertain, with rising covid-19 infection rates leading to increasing risks of supply chain interruption and further restrictions on customer activities out of the home. In these challenging conditions our teams continue to work hard and have proven our ability to operate with social distancing and adapt to new digital channels.”

Jeremy King – what’s going on beggars belief: Corbin & King co-founder Jeremy King has claimed the on-going regulations being imposed on the sector “beggars belief”. In an email to customers he stated: “It does beggar belief what is going on at present – I am beside myself with frustration. For restaurateurs it really does feel as if a Think Tank has been assembled to find ways of bringing London’s restaurants to their knees – Congestion Charge, curfews, road barriers, indecision, ‘Don’t go to Work’ et cetera couldn’t be more effective at dissuading people from going to restaurants. Mercifully we are still supported by sufficient loyal and intrepid customers to keep our head above water and the atmosphere in the restaurants has actually been rather electric in the feeling of dogged determination that people have to relax and enjoy themselves. On Friday I watched Zedel do its 10:00pm ‘exiting’ and then went on to see what was happening in Soho. It was like a rave – the streets packed with people milling around, continuing to party or awaiting the tubes and buses to be less jammed and for taxis to reappear! I wouldn’t mind so much if someone could explain to me the logic and benefits of the curfew – because every medical authority I speak to shakes their head in despair.”

Escape Hunt reports ‘encouraging’ results since ease of lockdown: Escape Hunt has reported sales rose 44% in the 12 weeks prior to lockdown. Adjusted Ebitda loss in the half year to 30 June reduced to £816,000 (2019: £1,059,000). Revenue in the six weeks to 20 September was 72% of the same period in September. Richard Harpham, chief executive of Escape Hunt, said: “The six months ended 30 June may well have been the toughest period on record for leisure businesses with government enforced closures and consumers wary of socialising as a result of covid-19. Nevertheless, I am pleased to report strong progress in the period prior to the UK lockdown which endured from 21 March 2020 to the period end, as well as encouraging signs of recovery post period end and significant strategic and operational progress helped by supportive property conditions in which we expect a greater availability of sites on more favourable terms. In addition, we were encouraged that, prior to lockdown, all our UK sites had five-star ratings and were ranked in the top four on TripAdvisor in their respective cities under fun and games. Our sites have not been open for sufficiently long since lockdown to draw any firm conclusions, however, the evidence to date is encouraging, we are continuing to enjoy very positive consumer ratings, and as a result we are continuing with our strategic priorities in earnest. We are, however, aware of the growing rate of covid-19 infections and the possibility of further restrictions being imposed which may impact our progress.”

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