Greggs often gets plaudits for its canny use of social media channels, brand partnerships and its growing vegan menu. But perhaps CEO Roisin Currie and co should get more credit for their growth ambitions.

A steak bake is now seemingly available on every roadside, in every train station, petrol forecourt, shopping centre and suburban shop row. But that’s exactly what Currie is aiming for.

It’s all part of a plan to double turnover to £2.4bn by 2026, and the chain wants half of that growth to come from new stores. Greggs opened a “record” 147 stores in 2022. Ninety-four have already opened this year, so the high street baker is well on track to hit 150 net openings by the end of 2023.

Greggs property director Tony Rowson told The Grocer last week discussions were underway to build on eight airport sites, as well as extend its footprint with supermarkets, including the opening of cafés within Sainsbury’s stores, later this year.

While that’s great news for fans of Sausage, Bean & Cheese Melts, it’s also a welcome success story needed by the sector during the cost of living crisis. 

First-half sales at its 2,378 shops are up 21.5% year on year to £844m, Greggs’ sales update showed yesterday.

It’s not just about more stores for Greggs

The diversity of its estate was a real advantage during the pandemic, Rowson said. It allowed for lost city centre footfall to be replaced with trade from its suburban sites and click & collect.

This fuelled a bounceback from £13.7m of losses during the 2020 lockdowns. Momentum has continued with pre-tax profits growing to £63.7m during the first half of 2023, up from £55.8m in the same period in 2022 – even with a £16.3m writedown due to Covid insurance claims.

And things will likely get better as Greggs continues with its image change. No longer just a cheap option for hungry tradespeople or office workers in need of a quick breakfast or lunch, Greggs is now also open for dinner, with extended hours across its estate.

Evening is Greggs’ fastest-growing daypart, especially for company-run stores, which attributed 8.3% of sales to the meal time, up from 6.5% for the first six months of 2022.

Longer opening hours come alongside the roll out of click & collect services across most stores and in addition to a nationwide delivery tie-up with Just Eat, launched in 2020. Greggs is also currently trailing a made-to-order sandwich service across a small number of stores, and is part way through a trial with a second delivery partner Deliveroo.

“More than 10% of transactions now come through our app,” Currie said. “That’s because we reward customers’ loyalty.”

Among the benefits offered are a ‘tenth product free’ offer after nine items are bought, as well as a free sweet treat on a customer’s birthday. This continues to add to Greggs’ perception as a “value” option for food.  

Greggs’ brand health has ‘never been higher’

“The consumer is constantly looking at opportunities where they can save money,” Currie said. “We are very well-placed to make sure we can help those consumers make their money go further.”

That sentiment clearly resonates with customers. Greggs’ brand health has “never been higher” the chain’s results read, with a nod to its 2022 YouGov Brand Index results.

Currie is rightly proud of the baker’s index score, which grew to 25.0 in 2022 from 23.8 the previous year. This put Greggs ahead of multinational-backed giant and growing competitor Costa Coffee, as well as Pret a Manger and Caffè Nero.

Its consideration score, which measures how likely customers are considering a purchase, was second only to McDonald’s, improving by 4.2 points to 36.3 in 2022.

Yet Greggs must also take on its share of doom and gloom along with others in the sector. In fact, Currie expects inflation to remain baked into its business at a rate of 9% by the end of the year, driven in part by increased people and pay costs. This has already led to price increases, most recently in June on a “small number” of products, Currie said. 

Not resting on her laurels, despite a stellar first-half performance, is a wise move from Currie. The bakery boss predicts inflation will continue to nip at the business for some time. But amid the headlines about struggling retailers, food shortages and profiteering claims, a little gloating would be understandable.

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