“In the right locations there is no reason why Greggs could not trade 24-7,” believes MCA’s director of insight Steve Gotham.
Earlier this week the bakery food-to-go chain revealed it was trialling hot food products, aimed at the evening day-part, in 100 sites, as it looked to tap into opportunities for the brand in its non-traditional trading hours.
Roger Whiteside, chief executive, Greggs said the business was trying to follow trends seen in the marketplace, such as healthy eating and breakfast out-of-home, with hot food one of the big trends it has chosen to pursue, and one “that is growing rapidly in the business”.
Hot sandwiches were a natural starting point for the brand, he said, but it is now starting to experiment with other options, such as chicken goujons, potato wedges and pasta dishes.
Whiteside said Greggs was “trying to develop a menu we think ultimately might have appeal at a strategic level at the evening day part” when Greggs doesn’t traditionally trade. He said it provided an opportunity for the long-term for the chain to develop a reputation for selling products at that time of day also. Greggs is “playing with the menu” at the 100 trial units, to see what works and what doesn’t, he said.
On which locations would work for 24-7 trading, Gotham said they would be limited towards travel sites and selected out of town sites with substantial passing traffic, rather than high street.
“There will always be a significant proportion of consumers buying on price-led value at every day-part and this is a core part of the Greggs’ brand appeal. For sure, an attractive hot food offering is disproportionately more important during the evening day-part and assuming the business can raise awareness of this and execute it well, then Greggs should be able to add this extra dimension to its expanding set of business growth drivers,” said Gotham.
Last autumn Greggs began a home delivery trial with UberEats in Newcastle. While Whiteside said the trial had been about learning about the level of demand for the service, and operationally how it would work, he hinted that the potential success of its evening hot food trials could be key to whether or not the chain moved forward with plans for home delivery.
“We are conscious it is a growing market and we feel that we need to be learning in that market so that we can decide how best to tackle it in the future if we feel it is something that relevance to Greggs,” said Whiteside.
“I think it will have more relevance to Greggs over the longer term if we are successful, as we intend to be, in developing a reputation for a menu that sells in the early evening because it appears that demand for home delivery is skewed towards evening meal solutions rather than a breakfast or lunch meal solution.”
Earlier this week the chain announced total sales growth of 7.4% and like-for-like sales growth up 3.7% across its managed shop estate. Whiteside also revealed Greggs was also looking to up the number of its drive-thru sites in 2018.
