Greggs, the high street bakery chain, is looking away from city centre locations for new stores but sees scope for growth on high streets in the southeast and west of England.
Richard Hutton, director of finance at Greggs, said city centre locations have underperformed while the high street performance has been “in line with the norm.”
“Overall things feel a bit more buoyant and we see a strong future for high streets,” Hutton said. “There are still parts of the country that we don’t have high street locations and will target these areas.”
He said city centre stores have struggled as online shopping habits have resulted in a decline of city centre footfall. In response to this he said for future openings the company “might relocate our shops to where people are spending their time.”
The bakery, which reported a 3.2% rise in like-for-like sales in the 26 weeks to 28 June, said the consistently fair weather encouraged people into towns and the continued warm spell has boosted sandwich sales with customers buying food for picnics.
Hutton said there has been “encouraging results from sales initiatives” which included a new coffee blend that, since its introduction in January, has produced “high double digit growth” for the first half of the year.
Greggs re-launched its sandwich range this month to include a greater choice of sandwiches under 400 calories, which Hatton said is now worth £1m weekly to the company. The Balanced Choice range has been extended to 15 sandwiches in response to growing customer interest in lower calorie options.
Following this success the company will examine other products that could be offered as a low calorie alternative
Hutton said these changes would not extend to the sausage rolls or pasties: “We would be very cautious playing with our savouries as I think we would meddle with these at our peril.”
Instead the company will look at portion sizes on cakes to offer different sized products rather than compromising on flavours and taste. “Some products offer themselves to low calorie options and some by their nature are more indulgent.”
Hutton said sausage rolls and pasties are worth £100m a year to the company and account for one third of the sales.
The company is continuing to upgrade its shops with an on-going refit programme that will see close to 200 stores refurbished this year and the programme will take a few years to complete all the stores to the “modern food on the go” appeal.
The company is also looking to grow its franchise partnerships including those with Moto and Euro Garages to enhance Greggs’ presence in food on the go markets such as the petrol forecourts.
