Comment: Greggs still on a roll…
Greggs is often voted one of the most popular dining brands in the UK, which is some achievement when you consider where the business comes from; when it was limited to having some fans in the North of England and was predominantly a bakery business selling its own bread and other baked goods.
Even Roger Whiteside, former CEO of Greggs, admitted back in mid-2019 that nobody really went on the hunt for a Greggs’ outlet and that if a unit was not near to a customer when they were hungry for a sausage roll or sandwich then they would not have gone looking for one. They would simply shop elsewhere.
On this basis, he was the architect of a grand plan that sought to position its outlets right next to customers. Not only on high streets but also by opening units in secondary locations such as office blocks, garages, motorway service stations, and industrial parks. But arguably more important to the future growth of Greggs was his strategic decision to reposition the business as a food-to-go operation and shift it away from being a traditional old school bakery chain.
With this fundamental shift in the model his belief was that the company could reach 2,500 outlets – a serious leap from its then 700-strong portfolio of units. With the benefit of hindsight we can now say Whiteside has been proven wrong with his forecasts because although the business has since grown to nearly 2,500 outlets the expectation under the new CEO Roisin Currie is that it could go on to grow to as many as 4,500 units.
His perfect execution of the grand plan has undoubtedly resulted in one of the great success stories in UK retail over recent years. City analysts have certainly underestimated its potential – especially when it was laid low during Covid-19 and doubts were cast on its ability to successfully trade through that tough period and continue its growth trajectory. In reality during the pandemic and beyond Greggs has actually seen an acceleration in its expansionary zeal.
From what was a rather lowly-ranked regional operator largely tied to its discount position and loyal cost-conscious customer base Greggs has become a universally loved brand. With the incredible launch of the vegan sausage roll, the clever use of social media, the genuine authenticity that runs through the company and its people, and initiatives such as the quirky tie-up with Primark the business has certainly shrugged off its one-dimensional image.
This broadening out of its character is continuing with its ongoing menu development that includes adding more hot food such as chicken goujons, wedges and pizzas. The vegan sausage roll also now has some new friends with the plant-based offering that includes the likes of the sweet potato bhaji and rice bowl, along with the Mexican chicken-free bake.
This hot menu is part of a move to extend the opening hours of many stores to 8pm or beyond – we’ve no doubt all read about Greggs winning the right to sell its sausage rolls at its new flagship Leicester Square shop until 2am – which is now the strongest growing segment of the trading day. We can expect to see 24-hour drive-thru shops and an extended home delivery window at many outlets.
The flexibility of the model can be seen in the continued development of its formats that now extend from the full service drive-thru to kiosks. There has also been a move into travel hubs with sites recently opened at Canary Wharf Station and at Glasgow and Cardiff airports that represent a push into more of these prime locations with their high footfalls.
When you combine this flexibility of trading format with the growing appeal of the brand among a broader demographic of customers – and then add in the current cost-of-living crisis as an extra driver – then it’s tough to see how Greggs can stall in its ongoing journey to the hearts and stomachs of more customers.
