Greggs’ recipe for success
The bakery giant announced that profit before tax increased by 14.2% to £63.7m by the beginning of July. With the held of the co-head of UK retail sector at Gowling WLG, here are some things that have spurred growth at Greggs
By May 2023, Greggs’ sales had shot up by nearly a fifth compared with the same time in 2022, as its offering of sausage rolls and pasties remained “compelling” to customers during the cost-of-living crisis.
In the spring of this year, the country-wide chain of bakeries also revealed that hot food such as chicken goujons, wedges and pizza increased its total sales by 17% on top of its 2022 financial performance.
The retailer announced at the beginning of August that its profit before tax increased 14.2% to £63.7m by the beginning of July 2023 – by which time it traded from a total of 2,378 shops, with plans to open an additional 150 before the end of the year.
Jocelyn Paulley, the co-head of the UK retail sector at law firm Gowling WLG, says: “Impressively, Greggs has managed to sustain growth and has ambitious plans to expand its physical outlet presence, as well as take advantage of commercial rents falling and vacant retail spaces.”
Due to Greggs’ sustained appearance across busy commuter areas – particularly in places such as Canary Wharf station, and Cardiff and Glasgow airports – as well as its recent launch in Primark stores, H1 sales increased 21.5% due to all of its brick-and-mortar stores experiencing a like-for-like increase of 16%.
Paulley continues to explain why this has worked out so well for the retailer, saying: “Strategic partnerships such as these are clearly working and align with consolidated high street shopping experiences that customers demand.
“As well as acting as an additional ‘pull’ in terms of physical footfall, this level of retail collaboration demonstrates a market resilience which is squarely focused on enhancing the in-store experience – helping retailers to navigate the current cost-of-living crisis and further support multichannel efforts.”
Paulley, whose expertise within retail lies in ecommerce, has also said that the group’s success in attracting a wider customer base can be attributed to the bakery chain’s expansion of its digital offering following the pandemic, as well as the extension of its opening hours at a number of its stores. This move has worked to “counteract the downturn from the cost-of-living crisis”, she says.
In addition, Paulley has pointed out that the company’s launch of vegan products has boosted its trading and has appealed to shifting consumer trends to maintain a high demand.
According to the group, its strong cash position of £139m will be supporting its plans for future investment in growth.
