Following the announcement of Greggs fourth quarter results yesterday, the company’s chief executive Roger Whiteside spoke to M&C about the company’s tech upgrade rollout, expansion into Northern Ireland and why the brand is “in the market now of food on the go, not take home baking”.
In yesterday’s trading update Greggs reported total sales were up 5.2% for the year to 2 January with managed shop like-for-likes up 4.7%.
The company said fourth quarter managed like-for-like sales were up 2.3% and Christmas trading was “in line with the overall trend for the fourth quarter”.
Balanced Choice
Greggs’ Balanced Choice range saw double-digit growth last year and now made up 10% of the Greggs’ sales, Whiteside said.
“From a standing start we’re pretty happy with that. It’s still growing double-digits so we’ve got plans for the rest of the year to keep refining and adding to the range.”
New soup options were being added to the range to take advantage of the colder weather and a new salad range would be coming out in spring, Whiteside said.
Greggs was entering the third year of its Balanced Choice rollout and more changes were still to come, he said.
“We’re in the market now of food on the go, not take home baking, we’re constantly refreshing the menu, looking for new ideas and extending the choice if we need to.
“We’re trying to get people to visit more frequently, the brand is not the issue, but getting people to come to the brand more frequently is the prize.”
Healthy eating trends were here to stay so Greggs was expanding its range further “so when you’re going out for breakfast you don’t just come to us on the days you fancy treating yourself to a bacon bap,” Whiteside said.
“We want people to come to us for breakfast every day they’re out there grabbing breakfast on the go.
“We’re famous obviously for pasties and sausage rolls and that’s not going to change, if people want a pasty or a sausage roll we still want Greggs to be the go to place, we’ll be famous for that forever I should think, but alongside that now we’re number two in the sandwich market so we want people to come to us every time they’re thinking about a sandwich.”
Coffee and promotions
Coffee was the fastest growing beverage in the Greggs range and had reached the point where the company could justify a menu extension and would be adding a flat white and an improved mocha to the menu, Whiteside said.
“Each year we’ve been growing double-digit in coffee, we’re now regularly over £1 million a week, every week.
“Now’s the time to broaden the appeal to see whether we can get people who were not coming to us because they couldn’t get their favourite flat white, there’s no reason now why they can’t.
“They’ll be getting it for £1.75 and if they buy something to eat with it they’ll be getting it for £2.”
Greggs changed its policy towards promotions two years ago and would be sticking with its new formula of promoting meal deals instead of individual products, Whiteside said.
“We want those deals to be there not for six weeks and then go, they’re permanent so people come in knowing that they can eat and drink at Greggs at very attractive prices.”
Technology
Greggs was halfway through a two year, $25million technology overhaul, Whiteside said.
“This is our big year for technology; we’re launching SSP finance into the business, on the back of that we will carry out a complete overhaul of our shop ordering system and then later on our warehouse management system.”
Contactless payments had seen exponential growth and Whiteside said he was expecting to see more contactless payments being made using smartphones.
“We’re very much engaged in trying to make sure we’re making progress along that digital engagement channel so that ultimately once we get all the back office systems fully developed - which will take a couple more years - we will then look to launch a transactional online channel so that people can order online, pay and collect.”
New stores
Last year Greggs completed 202 refits plus 20 conversions of larger bakery cafés, Whiteside said.
The 76-year-old company had a strong presence in major shopping destinations, but previously hadn’t had much of a presence in travel locations and office and retail parks, he said.
“All of that is virgin territory, so that’s where we’re busy opening shops and they’re doing very well.”
In 2015 Greggs opened 122 new stores and closed 74, leaving 1698 shops trading as of 2 January - including 105 franchised shops operated by partners in travel and other convenience locations.
“We’re back on the store growth trail,” Whiteside said.
Greggs typically grew by around 50 net stores and this year would be no different, he said.
“This year that’ll include our first company-owned shop in Northern Ireland, that’s a whole new region for us to open up in.
“We’ve signed one lease up so far, but obviously we’re doing that with a vision of being able to open up more.
“We’re just going to keep on opening up stores as long as they’re successful.”
