This week Greggs announced they’d achieved a pre-tax profit of £204m in 2024, up 8.3% on the year before. We can learn a lot from their transformation journey from traditional bakery chain to a modern food-on-the-go consumer goods business. Here is our take on this:
The Greggs secret ingredient to success:
Being available and visible at the right time
Greggs are moving away from high streets to bring their stores to the customer, which has led to an increase in evening sales. As the BBC reported: “A decade ago, four-fifths of Greggs shops were on the High Street. Today, the company says almost half of its shops are now in alternative locations such as petrol forecourts, roadsides, transport hubs, retail parks, supermarkets, universities and hospitals.”
Customer centric approach
Greggs has worked closely to understand their customers and buying patterns. It has introduced several menu changes in recent months, focusing on expanding its hot food offerings and reintroducing popular items. The menu has diversified to offer foods which represent “meals” rather than “snacks.” This is in response to data which suggests shoppers have cut back on snacks. The latest monthly report on supermarket sales by Kantar, suggested that Britons had a snack on 330m fewer occasions in 2024 than in 2020.
The power of digital transformation
Recognising the power of technology, Greggs has embraced digital transformation by developing a robust mobile app and enhancing its online presence. According to Insight Trends World the Greggs App is now used in 20% of transactions, up from 12.5% in 2023. Moreover, Greggs’ delivery services have been expanded to partner with Just Eat and Uber Eats, resulting in a 31% year-on-year increase in delivery sales. Investing in real-time product availability has paid dividends for Greggs and meant they retain customer loyalty.
Repeat custom is clearly valued and the Greggs Rewards app combines mobile payments with a loyalty program, allowing customers to pay in-store via QR codes and earn rewards.
Investing in people is part of the strategy
Greggs have a 3.7* score on Glassdoor, suggesting employees have a good working experience. The BBC has reported that for the first time, Greggs is to hand 80% of its 33,000 workers a record £20.5m profit bonus after ringing up more than £2bn of annual sales.
Forward thinking strategy
Greggs seem to be firmly on the front foot, looking ahead to upcoming trends and being ready to embrace change. They will face challenges as they battle the effect of an increased cost of living and see the impact of the increases in employer National Insurance contributions and other employment costs. This has already led to a recent slump in shares by 12% and may translate into higher prices for their loyal customers. We believe Greggs will weather the economic storm if they continue to know their customers, embrace changing customer behaviours, and continue to deliver value and rewards.
At Nine Feet Tall our mission is to create a world where change is embraced, and we believe Greggs have demonstrated an agility to adapt and transform to deliver a customer centric offering which will continue to bring them success.
