Hot to trot
One of the most enjoyable aspects of travelling around the UK for me is visiting villages, towns and cities and popping into independent bakers to sample their specialities. Most communities still proudly produce local delicacies to a loyal clientele but one store I don’t hunt for when I travel is Greggs.
Greggs’ chief executive Roger Whiteside openly admits nobody else goes on the hunt for one of his outlets either, stating if a unit isn’t near a customer when they’re hungry for a sausage roll or sandwich, they won’t go looking for one and will shop elsewhere.
To address this situation the business has worked to position its outlets next to customers. Four-fifths (80%) of Greggs stores used to be in high streets but, under the stewardship of Whiteside, 300 have been closed to leave about 700 at present. Instead, units have opened in secondary locations away from the high street – in office blocks, garages, motorway service stations and industrial parks, where Greggs puts pods outside the likes of Wickes DIY.
Whiteside is basically putting Greggs’ units in locations you’d never dream of placing a bakery. The big play he’s reaping tremendous rewards from is to reposition the business as a food-to-go operation and away from being an old-school bakery chain.
Whiteside says: “We’ve slashed the range of cakes and virtually taken out bread. You have to say ‘no’ to customers and explain we’re not that type of business any more. I can’t escape the logic that people buy bread in supermarkets.”
The company still adheres to the founders’ original purpose of making “fresh, properly prepared food available to all”, it just happens different food now emerges from Greggs’ production facilities. The prize for Whiteside is to eat into a food-to-go market that’s worth £22.5bn a year, according to The NPD Group, and that continues to grow at a healthy rate.
When launching his strategic shift, Whiteside will have taken into account four-fifths (80%) of bakery purchases are consumed on the move. This is something independent bakeries should look to leverage greater value from, especially as the bakery industry currently accounts for a modest 5% of those £22.5bn sales.
Taking into account the growing delivery and click-and-collect segments, the opportunity is enormous. This hasn’t been lost on Whiteside and he’s experimenting in all these areas as well as developing Greggs’ digital footprint. This includes a clever use of social media, which came into its own during the incredibly successful launch of its vegan sausage roll.
If any baker doubts the size of opportunity the food-to-go gravy train offers, remember Greggs aims to operate up to 2,500 units – a 3.5-times jump from where it stands today.
Whether these shops will stock the local delicacies I seek remains to be seen as Whiteside has said such lines will only appear if they “sell in sufficient numbers”. In reality, many localised items such as Tottenham cake will only appeal to fervent Tottenham locals, with the rest of the country not interested. This is a fair point because although I usually hunt out such local items on my travels, I live close to Tottenham and I’d be hard pressed to walk to the end of the road for one of those garish pink creations.
Glynn Davis, editor of Retail Insider
This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.