Greggs is keen to open in as many train stations and major travel hubs as it can secure sites in, despite the fact footfall has not returned to pre-pandemic levels, chief executive Roger Whiteside has said.
Speaking during a press conference following its trading update yesterday, he said that footfall in city centre and office locations was around 10% down – “and we don’t know whether they will ever get back to normal numbers”.
On a strategic level he said this did not concern the food to go retailer as those sites don’t currently make up a particularly high percentage of its total estate, and that even if footfall never returned to former levels, “London 90% full is still fuller than anything else I know”.
Whiteside said the business was “busy opening shops in London” due to the fact it is managing to secure lower rents, with its latest opening on The Strand yesterday and one to come in Leicester Square in a few weeks’ time.
“All the major transport hubs have obviously suffered through Covid – we are desperate to get into those,” he said, as those locations are coming back strongly.
“We have opened in Liverpool and Birmingham airports and some high-profile London locations, such as St Pancras, during Covid, and we have got plans to open in as many stations as we can get to.”
Commenting on Greggs 27% like-for-like growth in the first 19 weeks of the year, versus 2021, Whiteside said that while the figures were against a period of lockdown, the retailer still saw growth of 11% versus 2019. Some of that growth has been due to inflation but also the positive impact of its significantly developed delivery channel.
In terms of current uncertainties, he said it was “all around cost”, and that while Greggs had not seen any indications that consumers were changing their spending behaviours within its stores, it was “on high alert” for any impact on sales from cost pressures on consumers and was monitoring the wider market.
But Whiteside said that it was “inescapable” in the current climate that prices would need to move again. The business increased its prices at the beginning of the year, with prices rising again when the VAT relief came to an end in April, “and we are going to have to move prices again very soon”.
He said the business was looking selectively at where prices could move and that it wouldn’t pass on all the inflation. “When we are forced to put prices up it is always by five or 10 pence typically, and we will only do it where we can see that the gap between us and our competitors isn’t going to be narrowed.
Whiteside said that price rises would not be on every product but would cover the full scope of its offering as inflation is being felt everywhere. “We look to absorb as much as we can, which comes at the expense of the shareholder, and we look to where we can do things that reduce cost without impacting the size or the quality of the product.”
Some changes around ingredients swaps have been forced on the business. For example, the impact of the war in Ukraine means they cannot get sunflower oil and are having to use alternative products.
He said the business was confident that it was a resilient brand, but that it “would have to wait and see how things pan out in terms of whether people have enough money in their pocket to even afford a Greggs”.
Whiteside, winner of MCA’s Lifetime Achievement Award at the 2022 Retailers’ Retailer Awards, will be stepping down as chief executive at Greggs’ AGM later today (17 May), to be succeeded by current retail and property director Roisin Currie.
