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Jobs could go at Greggs while Pizza Hut shuts 29 outlets

Emma Lunn
Written By:
Emma Lunn

There was more bad news for the fast food sector today as Greggs published a downbeat trading update and Pizza Hut confirmed 29 restaurants will close.

High street bakery store Greggs reported that shop sales improved to 76.1% of 2019 levels in the four weeks to 26 September 2020, following a “slower” August.

But the company has warned that it will need to reduce its employment costs when the Coronavirus Jobs Retention Scheme ends in October.

Greggs trading update said the company would be “taking steps to ensure that its employment costs reflected the estimated level of demand from November onwards”.

The statement said: “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.”

Greggs pointed out that with in-store dining closed, it had not been able to take part in the government’s Eat Out to Help Out scheme.

But it said that “increased out-of-home activity in September” appears to have driven a recovery in customer visits.

About 100 of Greggs’ larger shops have now reopened their customer seating with appropriate social distancing in place.

Greggs’ digital offer is developing quickly, benefiting from increased investment during lockdown.  Customers can now “click and collect” orders in all shops, allowing customers to pre-order and pay ahead of visiting to collect their order.

It’s also rolling out a national delivery offer in partnership with Just Eat.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says: “Greggs shows it is keeping up with the nation’s changing appetite for online sales, and now customers can also order Greggs deliveries on the Just Eat app in many cities. The pandemic has still taken a big bite out of business and with trading activity expected to remain below normal for the foreseeable future, some employees are being asked to reduce their hours to compensate and minimise job losses.

“But Greggs has taken its expansion programme out of the freezer and plans to open 20 new shops which can be easily accessed by car, to take advantage of changing snacking and shopping habits.”

Elsewhere on the high street, Pizza Hut has confirmed 29 of its UK restaurants will close, putting 450 jobs at risk.

The pizza chain has entered into a company voluntary arrangement (CVA) and creditors have now voted through a plan to close restaurants in order to reduce rent and bills in a bid to save the company.

A Pizza Hut Restaurants spokesperson says: “We are delighted to have reached such a constructive position in partnership with our landlords and creditors.

“We appreciate the support of everyone involved and this outcome provides us with a strong platform to secure the long-term future of the business including over 5,000 jobs and over 200 restaurants.

“Our focus is now business as usual supporting all of our team members and continuing to provide a Covid-safe restaurant experience for our guests.”