Upper Crust owner’s sales fall as Omicron kept commuters away
SSP, which operates fast food chains at railway stations and airports, is ‘well positioned’ for summer
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Last modified on Fri 4 Feb 2022 09.55 EST
The owner of the Upper Crust sandwich chain has reported a drop in sales as concerns about the Omicron coronavirus variant kept customers at home but said it was hopeful of better performance as commuters return to offices.
SSP Group operates fast food chains targeted at railway stations and airports, which also includes Camden Food Co, Ritazza and Burger King franchises at travel locations.
Hit hard by pandemic restrictions on travel, sales in the eight weeks from 6 December were only 57% of the equivalent in pre-pandemic 2019, the company said in a trading update. That compared with 66% of 2019 levels across October and November.
Omicron was designated a variant of concern by the World Health Organization on 26 November, prompting a renewed wave of travel restrictions and concerns about the global economic recovery.
SSP, which lost more than £400m in the year to September, said sales were “resilient” during December but that they had “softened” in early January. Over the first four months of its financial year, group revenues were at about 62% of 2019 levels.
“The spread of the Omicron variant around the world and the subsequent government restrictions have inevitably had an impact on passenger numbers in many of our markets,” SSP said. However, the company added it was “confident in our ability to manage any short-term volatility” and “well-positioned” for the summer.
It also said sales in recent weeks had been “more encouraging” as governments again sought to lift restrictions following evidence that Omicron caused proportionally fewer cases of severe Covid-19.
Railway locations showed the fastest recovery, at 71% of 2019 levels, thanks to the gradual return to offices after the lifting of work-from-home guidance in England on 24 January.
In the longer term, SSP will have to contend with the expected permanent increase in people working from home on one or more days a week. Fewer than two in five UK workers worked from home during 2020 even at the height of lockdowns, but of those a significant proportion is expected to maintain some of the flexibility enforced by the pandemic.
SSP, which cut 5,000 jobs in June 2020 in response to the pandemic, said it had not changed its medium-term target to return to like-for-like revenues and profit margins “at broadly similar levels to 2019 by 2024”, suggesting it still expects a drawn-out recovery.
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