Consumer caution over Omicron takes a bite out of Greggs sales

Greggs has suffered an Omicron sales hit as the emergence of the new variant saw consumers acting more cautiously towards the end of year.

The bakery chain, best known for its sausage rolls and steak bakes, said like-for-like sales in the final quarter of last year rose 0.8% compared with pre-pandemic levels in 2019.

That was down from growth of 3.5% in the previous quarter.

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The update comes at the same time as latest footfall data showed a hoped-for bounce back for the high street in December did not materialise, blamed on the resurgence in coronavirus cases and Plan B guidance to work from home.

Greggs said it saw “a strong performance in October being followed by more challenging conditions as consumers responded to precautionary messages relating to the new coronavirus variant”.

The group, which has around 2,200 outlets across the UK, said it saw “continued disruption to staffing and supply chains” during the quarter.

It also noted that inflationary pressures had been rising towards the end of last year and were “likely to remain elevated in 2022”

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Greggs boss Roger Whiteside has previously pledged that despite the disruption, which has hit the availability of some products, the sausage roll would be safe.

Commenting on latest trading, Mr Whiteside said staff absences created by the Omicron wave of COVID-19 cases was “disruptive” and putting pressure on stores but added that it was “still a manageable number”.

The company also announced alongside Thursday’s update that he would be retiring as chief executive to be replaced by retail and property director, Roisin Currie, who takes over in May.

Mr Whiteside said Greggs had “made great progress in 2021 despite tough trading conditions” with like-for-like sales down 3.3% for the year as a whole after lockdowns took their toll early on.

The company said it sold 6.7 million shop-baked mince pies over the Christmas period and also launched a vegan festive bake.

Separately, footfall figures from data company Springboard showed a deterioration during December, with shopping location visits down by 18.6% compared with 2019.

In November, this had been a slightly smaller 14.5% off pre-pandemic levels.

Springboard said footfall in the period covered from 28 November to 2 January “was clearly impacted by the rapid spread of the Omicron variant and the introduction of Plan B guidance by the government from the third week of the month”.

“This meant that the natural boost in shopper activity which typically occurs in the run up to Christmas did not materialise,” the report said.

That was “due to a blend of consumers’ nervousness around the rapid rise in infections and the risk of missing out on Christmas, households isolating due to infection and the re-introduction of working from home”, Springboard added.

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