5/11/2018 Euromonitor International - Analysis

Greggs Plc in Consumer Foodservice (United Kingdom)

Local Company Pro le | 29 Jun 2015

STRATEGIC DIRECTION
Greggs is expected to shift its focus further towards fast food in the forecast period. In May 2015, the company notably
announced that some of its outlets had stopped stocking bread in order to make more space for hot drinks, snacks and
sandwiches. The company will also continue to roll out seating to more of its outlets, with around 200 outlets gaining
seating in 2015. The chain will also focus on further expanding its food range in 2015, launching omelettes and breakfast
baguettes. The chain is keen to grow morning/breakfast sales, with high-quality co ee thus likely to see a strong focus at
the start of the forecast period. The company is also expected to focus on shifting its network away from standalone high
street locations to locations with a higher footfall, such as shopping malls, motorway service stations and public
transportation hubs.

KEY FACTS

Summary 1 Greggs Plc: Key Facts

Full name of company: Greggs Plc
www: www.greggs.co.uk
Activities: Bakery products fast food, bakeries and baked goods
Source: Euromonitor International from company reports, company research, trade press, trade sources

Summary 2 Greggs Plc: Operational Indicators

Year end January 2012 2013 2014
Net sales £734.5 million £762.4 million £804.0 million
Number of employees N/a N/a 19,500
Source: Euromonitor International from company reports, company research, trade press, trade sources

SUPPLIERS
Greggs aims to use local suppliers where possible, using suppliers close to each outlet wherever commercially
practical. The company is strongly committed to the use of UK suppliers and has strong links to a number of millers, meat
and poultry processers, vegetable and produce suppliers and dairy companies. It also requires its suppliers to utilise UK-
produced raw materials wherever possible.

The company also has a strong focus on fresh in-store preparation, guaranteeing that all sandwiches are prepared in
store by hand in its outlets.

Many of goods are meanwhile sourced in-house, with the company operating nine regional bakeries and two
distribution centres in the UK, alongside two production centres of excellence. Baked goods are delivered fresh to outlets
on a daily basis. The company is thus highly vertically-integrated.

COMPETITIVE POSITIONING
Greggs ranked seventh in overall consumer foodservice in 2014 with a value share of over 1%, while the company
accounted for 3% of chained value sales in the year. The company derives its sales from bakery products fast food, where
it was the clear leader in the year with over 16% value share.

The company gained value share in chained consumer foodservice in 2014 over the previous year, seeing a good half a
percentage point share gain in bakery products fast food. Greggs bene ted from its launch of new ranges of hot drinks
and sandwiches. The company had previously performed strongly during the economic downturn and sluggish recovery,
thanks to its o er of low-cost and lling food. However, the company sought to reposition its brand at the end of the
review period in response to changing consumer demands.

The company notably responded to the health and wellness trend in 2014 by shifting its focus from traditional high-fat
pastries such as sausage rolls and pasties and launched a new range of 15 low-fat sandwiches under the Balanced Choice
range. This range furthermore included distinctive o erings such as Cajun Chicken in Flatbread. The chain also o ered
limited edition options, such as its hugely-successful steak and stilton roll in December 2014, with this positioned as a
premium alternative to more traditional sausage rolls.

Furthermore, Greggs launched its rst loyalty programme in February 2014. Greggs Rewards is hugely innovative,
being the rst digital-only loyalty programme launched in UK consumer foodservice, with users pre-loading an app on
smartphones with funds and paying via their phones. This results in quick and easy payments, while users also bene t
from incentives such as free hot drinks with every seven purchases and prize draws. This programme won numerous
awards, including Loyalty Programme of the Year at the 2014 Retail Systems Awards.

The company expanded outlet volume during the review period as a whole, seeing outlet volume growth of 18%.
However, Greggs' outlet volume remained steady at 1,671 outlets in 2014, with the chain seeking to avoid over-saturation
and instead focusing on improving quality and store design. The company notably installed seating in some outlets,
re tting 213 stores in the year. The chain furthermore improved its co ee blend in the year, thus addressing growing
demand for quality. These strategies proved successful, with co ee notably being Greggs' fastest growing product
category in 2014. The company is expected to remain cautious in terms of further network expansion in the forecast

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period.

Summary 3 Greggs Plc: Competitive Position 2014

Product type Foodservice value share Rank
Consumer foodservice 1.2% 7
100% home delivery/takeaway - -
Cafés/bars - -
Full-service restaurants - -
Fast food 4.6% 3
Self-service cafeterias - -
Street stalls/kiosks - -
Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews

© Euromonitor International 2018

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