Greggs ‘will not bounce back until 2022’

Greggs says it does not expect profits to return to pre-Covid levels until 2022 at the earliest.

Greggs employees

The bakery chain has been battling a sales slump due to the coronavirus pandemic.

While its decline in sales is slowing, it still expects a £15m loss for the year, which would be its first annual loss since it floated in the 1980s.

Greggs made 820 job cuts at the end of last year, after its sales were hit by coronavirus lockdowns and restrictions.

Chief executive Roger Whiteside said the impact of the Covid-19 crisis had been “enormous” and that a fresh lockdown meant “significant uncertainties remain in the near term”.

Coronavirus restrictions towards the end of last year led to “variable trading conditions across the UK”, he said.

Sales in the final three months of the year fell by nearly a fifth, but this decline was less than its sales slump in the third quarter.

In September, the bakery business said it was in talks with staff to cut hours in an effort to minimise job losses.

But it still decided to cut 820 jobs because of “lockdown levels of business” as High Streets were hit by the crisis.

“Looking ahead, the significant uncertainty over the duration of social restrictions, along with the impact of higher unemployment levels, makes it difficult to predict performance,” the firm said.

“However, we do not expect that profits will return to pre-Covid levels until 2022 at the earliest.”

Greggs sign

Greggs said on Wednesday that total sales for the year were down nearly a third to £811m, but government support had helped to limit pre-tax losses.

It said it had developed its takeaway business and a delivery tie-up with Just Eat, and had also seen “strong sales” through its partnership with retailer Iceland.

“We have taken action to position Greggs to withstand further short-term shocks and are optimistic about our prospects for growth once social restrictions are lifted,” Mr Whiteside added.

Greggs wants to open about 100 new stores, on a net basis, over the year ahead.

Julie Palmer, a partner at insolvency consultants Begbies Traynor, said: “The latest national lockdown will be unwelcome news for Greggs, which has operated shrewdly during the past year in spite of a lack of footfall, with non-essential stores forced to close and millions working from home.

“The bakery chain has had to adapt its business model and invest digitally to accommodate for the rapid change in shopping habits, offering click-and-collect purchases, as well as a nationwide delivery service through its partnership with Just Eat.

“This should provide a solid base for the business to expand when government restrictions are eased and the world returns to some normality.”

Coronavirus: Coca-Cola restructuring cuts 2,200 jobs worldwide

Coca-Cola is to cut about 2,200 jobs in its global workforce as part of a restructuring plan.

The soft drinks giant’s restructure has been accelerated by the coronavirus pandemic which has seen the widespread closure of venues where Coke is sold.

The bulk of the layoffs will be in the US, where it will shed 1,200 jobs.

At the end of 2019, Coca-Cola had around 86,000 employees but faces pressure on its revenues which have been hammered by the pandemic.

About half of Coca-Cola’s sales typically comes from consumers drinking its beverages away from home. Social restrictions to curb the spread of the virus have led to widespread closures of bars, restaurants, cinemas and sports stadiums where its drinks are sold.

In August, Coke said it would offer 4,000 workers in the US, Canada and Puerto Rico voluntary layoff packages.

Coke expects the job cuts to result in annual savings of between $350 million and $550 million, a spokesman for the company said.

Slimming down

Coke has responded to the crisis with plans to restructure its business and slim down its portfolio. 

The move will see the global drinks giant slash its 430 master brands by more than half to 200, to focus on products that are growing and can achieve a large scale. 

It is retiring its Tab soda and Zico coconut water brands, and earlier this year closed its Odwalla juice and smoothie business.

The Atlanta-based company reported revenue of $8.65bn (£6.4bn) for its latest quarter results , a decline of 9% from a year earlier.

The job losses do not affect employees at its bottling plants, most of which are independent. 

These bottling operations employ hundreds of thousands of people around the globe.

Coronavirus: Qantas adds to job cuts by outsourcing 2,000 roles

Qantas will outsource more than 2,000 ground staff roles in an effort to limit its financial losses.

The job cuts are on top of 6,000 roles already announced by Australia’s flag carrier earlier this year. 

Qantas announced a $2bn (£1bn) loss in August due to Covid-19 and associated border restrictions.

“Unfortunately, Covid has turned aviation upside down,” said Andrew David, the airline’s domestic and international chief executive. 

“Airlines around the world are having to make dramatic decisions in order to survive and the damage will take years to repair,” he added.

Qantas hopes to save about $74m annually, based on pre-Covid levels of flying, by switching to third-party providers instead of handling its own ground services.

It also expects to save $59m over five years by avoiding new spending on ground handling equipment such as aircraft tugs and baggage loaders.

Affected employees will be entitled to a redundancy package and given support to transition to new jobs, the airline said.

Turbulence ahead

There has been some good news for the airline’s recovery, with domestic routes starting to recover as state governments lift interstate travel restrictions. 

But Qantas is still predicting bleak times ahead, with more losses next year due to a drop in revenue of $7.4bn. 

It does not expect to fly internationally until late in 2021 – with the exception of a potential travel bubble with New Zealand.

The airline has also taken on an additional $1.1bn debt in order to keep operating. 

It’s not alone. The International Air Transport Association (IATA) predicts airlines globally are on course to lose $157bn this year and next. 

Passenger numbers are expected to drop to 1.8bn this year from 4.5bn in 2019. 

IATA says those numbers will recover only partially to 2.8bn next year.