Greggs is planning to roll out a nationwide delivery service later this year to help maintain its growth momentum following a strong end to 2019.
CEO Roger Whiteside said today, as the bakery chain revealed results for a record year, that the business had been conducting trials across major UK cities with Deliveroo, Uber Eats and Just Eat to decide who would be the best partner. The trials took place in London, Glasgow, Newcastle and Birmingham over the last two years.
The Greggs boss added he had been “pleasantly surprised” at the extent of the demand from customers who wanted the group’s savoury and sweet products delivered.
“So, we are going to roll out delivery nationwide, we just need to decide who with,” he said. “That announcement is yet to be made but we have been experimenting with the different choices available. We plan to roll out later in the year and try and reach as many customers as possible who want it delivered.”
He added that the average transaction value for delivery was three times higher than it is for a single customer walking into a shop as customers order more to justify the delivery fee.
It came as Greggs announced it had made a special payment of £7m to its 25,000 workers in stores, manufacturing sites and head office, all of whom helped the business achieve a record financial performance in 2019. Workers who joined before the end of March 2019 will each receive £300 in their pay packet, with those who joined later receiving a smaller bonus.
In an end-of-year trading update this morning, Greggs revealed total sales for 2019 rose 13.5%, compared with 7.2% in the previous year, and like-for-like sales jumped 9.2%, compared with 2.9% in 2018.
Like-for-like growth slowed in the fourth quarter of 2019 to 8.7% but was still ahead of the 5.2% increase at the end of 2018.
Whiteside said the publicity around its vegan sausage roll had attracted new customers to its shops and the new launch was one of the business’ top 10 bestselling lines.
He added that the newly launched vegan steak bake had also gotten off to “a flying start” and the company would expand its vegan range where it could. The introduction of vegan products also boosted the sale of its traditional items, Whiteside said, as 86% of those buying vegan products were not vegans but flexitarians who would also buy other products.
“We are basically trying to come up with a vegan version of all of our bestselling lines if we can,” Whiteside said. “That won’t be entirely possible as the test we impose upon ourselves is that the vegan version must be as tasty as the non-vegan version – and that is quite difficult to achieve in some circumstances.
“We have done it very well with the sausage roll, and the customers seem to agree with us. The reaction to the vegan steak bake has been equally positive and so has the reaction to the doughnut.
“The difficulty is starting as you have to separate all the processes, but once you have started then adding to the process is relatively straightforward.”
He said Greggs hadn’t got the next product line-up yet but that vegan chicken “could be a way forward for us”.
Greggs added that it also expected its full-year underlying pre-tax profit to be slightly higher than previous forecasts.
The business, which now operates from 2,050 sites, opened 138 new shops in the year and closed 41.
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