Should I buy Greggs shares after its 2020 loss?

By on July 5, 2021

first_img Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has recommended Just Eat N.V. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. 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Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Nadia Yaqub | Friday, 19th March, 2021 | More on: GRG Greggs (LSE: GRG) shares are in the limelight. The company posted its first ever loss earlier this week. The stock has continued to soar during the pandemic. The shares are now expensive, but I’d still buy at these levels. Here’s why.The resultsGreggs total 2020 sales fell 31% to £811m, while profits swung to a £14m loss. This compared to a pre-tax profit of £108m the previous year.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…As I mentioned, this was Greggs first ever loss but I don’t think the results are that bad. In fact, I think given how challenging the pandemic has been, the numbers are resilient. I reckon this is because of the management team’s quick and decisive actions.Last year was all about cash preservation and Greggs did exactly this. It cut its dividend like most other companies and made costs cuts. The FTSE 250 firm made over 800 redundancies.Strong brandI reckon Greggs has a strong brand and product offering. To me, it’s a leading UK food-on-the-go retailer and has over 2,000 outlets. Before the pandemic, the company was doing well. So I expect this to continue, in time, once government restrictions have been fully lifted.In terms of the products, let me be frank, they are very affordable and offer good value. So even if economic conditions worsen and unemployment soars, I think most consumers could splash out on one of Greggs’s pasties. I can’t forget to mention how popular the vegan sausage rolls were pre-coronavirus.Improving customer serviceI think what has helped Greggs shares is the company’s multi-channel approach. The click-and-collect service across the entire store estate has been beneficial. Greggs also has a partnership with Just Eat. I reckon this delivery agreement has somewhat softened the impact of the coronavirus crisis on the business.The bakery chain also offers its customers a rewards loyalty scheme to entice them back. Repeat business is good for revenue and profitability. I expect this, along with the existing customer service initiatives, to continue after the pandemic. Although once the stores are fully opened, I question whether many consumers will be using the Just Eat delivery option at the same rate as seen during the pandemic.Store estateI don’t think it’s a surprise that the stores affected by falling sales have been those in city centre locations and in transport links such as train stations. Once out of the pandemic, my concern is if office workers start to work from home permanently then these outlets may be impacted. This is clearly an important demographic for Greggs.Stores in retail parks or where shops could be accessed by car fared better. What I like about Greggs is that the stores are based in a broad range of locations, which should help the business weather the storm.But my other concern is further rises in staff and food ingredient costs. This could place pressure on profitability as well as the share price.My viewI’d expect Greggs shares to rally in the short-term based on the continued roll-out of the vaccine across the UK. As a long-term investor, I’m optimistic on the outlook for Greggs shares and would buy the stock. center_img Should I buy Greggs shares after its 2020 loss? See all posts by Nadia Yaqub Image source: Getty Images Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Simply click below to discover how you can take advantage of this. Our 6 ‘Best Buys Now’ Shareslast_img read more

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