Greggs, the UK-based bakery chain, has recently unveiled its ambitious expansion plans, which aim to open 150 new outlets per year and potentially have over 3,000 stores across the country.
This news comes after the company achieved a record high of £1.5bn in total sales last year, up by nearly a quarter from the previous year.
Despite cost inflation being a challenge, Greggs has managed to pass some of the cost onto consumers through price rises, which has contributed to its success.
In addition, the company is trialling the opening of stores at transport hubs, retail parks, and drive-thrus, and plans to pilot a 24-hour drive-thru this year.
This article will explore Greggs’ expansion plans, sales and profit, reasons for success, CEO and future plans, and innovation and pilot programs, providing insight into the company’s growth strategy and competitive advantage in the food retail industry.
Expansion Plans
Greggs, the UK bakery chain, has ambitious expansion plans that include opening 150 new outlets every year. The company already opened a record 186 new stores this year, while closing 39. With over 2,100 stores already in operation, Greggs sees potential for over 3,000 stores across the country, making it one of the largest bakery chains in the UK.
To achieve this goal, the company is trialling the opening of new stores at transport hubs, retail parks, and drive-thrus. In addition, Greggs plans to pilot a 24-hour drive-thru this year, although a location has not yet been selected.
These expansion plans reflect the company’s determination to continue offering affordable meals to its customers, while expanding its reach across the UK.
Sales and Profit
The company’s profit margin increased slightly over the past year, while total sales reached a record high of £1.5bn. According to Greggs’ latest financial report, the group’s pre-tax profit reached £148.3m in 2022, up from £145.6m the previous year. However, the profit increase was only 1.9%, which is relatively low compared to the significant rise in total sales. The group attributed this to cost inflation, which is expected to remain a challenge this year, reaching levels of 9% to 10%. To mitigate the impact of inflation, Greggs has managed to pass on some of the cost to consumers through price rises. For example, the price of its popular sausage roll is now £1.20, having cost £1 at the start of 2022. Nonetheless, prices are under review in an “uncertain market” as the group strives to balance profit and customer value.
The table below highlights the key financial numbers for Greggs in 2022. It shows the different components of the group’s revenue and expenses, including sales, cost of sales, operating expenses, and profit. Despite the challenges of cost inflation, Greggs was able to maintain a healthy profit margin of 9.9%. The vegan range continues to do well, and delivery services account for around 5% of the group’s total sales. The group’s winning products currently are evening meals such as pizza slices, chicken goujons, and wedges, as well as pizza boxes that customers can order from home. Overall, Greggs’ financial performance in 2022 demonstrates the group’s resilience and ability to adapt to changing market conditions.
| Component | Amount (£m) |
|---|---|
| Sales | 1,470.3 |
| Cost of Sales | 781.7 |
| Gross Profit | 688.6 |
| Operating Expenses | 550.3 |
| Operating Profit | 138.3 |
| Pre-tax Profit | 148.3 |
| Profit Margin | 9.9% |
Reasons for Success
One potential factor contributing to the success of the company could be the increasing demand for affordable meals during a period of rising living costs. Greggs has been able to retain loyal customers seeking value meals amidst these economic challenges.
Additionally, the firm’s winning products currently include evening meals such as pizza slices, chicken goujons, and wedges, as well as pizza boxes that customers can order from home.
Other factors that may have contributed to the success of Greggs include its ability to pass on some of the cost inflation to consumers through price rises. The company has managed to increase the price of its popular sausage roll from £1 to £1.20, which has helped to offset some of the cost inflation.
Furthermore, the vegan range continues to do well, indicating that the company is able to cater to different dietary preferences and trends.
Finally, around 5% of its total sales came from delivery services, with strong demand for sharing boxes, showing that the company is able to adapt to changing customer needs and preferences.
CEO and Future Plans
Roisin Currie, the CEO of the popular UK bakery chain, Greggs, has revealed the company’s plans to extend the opening hours of some of its stores. With around 500 stores already open until at least 8pm, Greggs plans to keep a further 300 stores open until 9pm this year. This move is aimed at catering to the growing demand for evening meals, which has been one of the reasons behind Greggs’ recent success.
In addition, Greggs plans to pilot a 24-hour drive-thru this year, although a location for this has not yet been selected. This move is part of the company’s wider expansion plans, which include adding 150 new outlets each year and trialling the opening of stores at transport hubs, retail parks, and drive-thrus.
With these plans, Greggs aims to tap into new markets and continue its growth trajectory, despite the challenges posed by cost inflation and an uncertain market.
Innovation and Pilot Programs
Innovation and pilot programs are key components of Greggs’ expansion strategy. The company is continuously looking for ways to improve its services, products, and customer experience. One of its recent innovations is the introduction of a vegan range, which has been a huge success. Greggs also plans to pilot a 24-hour drive-thru this year, which is a first for the company. Although the location for the drive-thru has not been selected, it is clear that Greggs is willing to experiment with new ideas to keep up with the changing market trends.
To further illustrate Greggs’ innovative spirit, the table below highlights some of the company’s recent pilot programs and their outcomes:
| Pilot Program | Outcome |
|---|---|
| Opening stores at transport hubs, retail parks, and drive-thrus | Successful expansion and increased accessibility for customers |
| Extending opening hours | Increased sales and customer satisfaction |
| Vegan range | Huge success and increased market share |
| Pizza manufacturing line in Enfield | Tripled national capacity for pizza and improved efficiency |
Through these pilot programs, Greggs has been able to identify successful strategies and implement them on a larger scale. As the company continues to grow, it is likely that innovation and pilot programs will remain an essential part of its expansion strategy.
