We won’t pay rent in a crisis, Greggs tells small landlords

Greggs, the bakery chain, has been accused of taking advantage of the pandemic by demanding rent reductions while making record profits.

The bakery has asked a landlord to cut its rent and wants suspension clauses added to all new leases. These would mean that the company, which made pre-tax profits of £55.5 million for the six months to July, would not have to pay rent for three months from the launch of “local or national disease, quarantine or national isolation restrictions due to plagues, epidemics or pandemics”.

Greggs made a £65.2 million loss from January to the end of June last year, during lockdowns.

Many landlords suffered steep drops in income after agreeing to allow big retailers to pay less rent in lockdowns, even though some tenants continued to trade.

Boots Opticians, the restaurant chain Nandos, the chain My Dentist, the sandwich shop Subway and the furniture chain SCS paid little or no rent last year, even though they traded for much of the time.

Greggs, the bakery chain, has been accused of taking advantage of the pandemic by demanding rent reductions while making record profits.

The bakery has asked a landlord to cut its rent and wants suspension clauses added to all new leases. These would mean that the company, which made pre-tax profits of £55.5 million for the six months to July, would not have to pay rent for three months from the launch of “local or national disease, quarantine or national isolation restrictions due to plagues, epidemics or pandemics”.

Greggs made a £65.2 million loss from January to the end of June last year, during lockdowns.

Many landlords suffered steep drops in income after agreeing to allow big retailers to pay less rent in lockdowns, even though some tenants continued to trade.

Boots Opticians, the restaurant chain Nandos, the chain My Dentist, the sandwich shop Subway and the furniture chain SCS paid little or no rent last year, even though they traded for much of the time.

Adam Coffer, the chairman of the Property Owners’ Forum, a landlords pressure group, said: “In principle I like the certainty of having some kind of form to help landlords navigate future restrictions. But any clause has to be reasonable and fair.

“The Greggs analogy is similar to me owing someone £5,000 and turning up for a beer with a brand new Rolex on my wrist.

“Landlords have always been willing to share the pain. But many of my members are small-scale landlords with one property. In many cases their tenants are companies owned by billionaires or multimillion-pound private equity companies.”

Greggs said: “We upheld all of our rental commitments throughout the pandemic, with no rental holidays. It would not be appropriate to talk about our stance on commercial negotiations.”

The British Property Federation estimated that landlords were owed £4.5 billion by companies in 2020, but much of this will now have been repaid.