Greggs is set to shake up the UK coffee market after launching a new value coffee shop concept called Greggs Moment, which undercuts players such as Costa and Starbucks on price.
The UK’s largest retail baker opened the Greggs Moment store in Newcastle last week, offering Fairtrade coffee, tea served in teapots and a new range of bakery products with customers able to choose their own fillings, sauces and dres-sings. Prices in the trial store are significantly lower than in other high street coffee chains.
Jeffrey Young, MD of research company Allegra Strategies, said the new concept had the potential to do very well. "The coffee market has become increasingly tiered, with artisan coffee shops, premium mass-market players like Costa and Starbucks and now this," he said. "Greggs would be mad not to look at coffee shops. It has a big audience and lots of experience with property, so it potentially could be a big success. There are still lots of poor-quality independent coffee shops out there that could be replaced."
New food products available in-store include gourmet square pies such as ’steak and cheesy mash’, a range of sandwiches prepared on-site and soup, plus an extensive breakfast range from breakfast sandwiches and mini pastries to porridge and a new product called the Brekkles Cake an Eccles cake topped with yoghurt and fruit.
Prices have been set at between 10-30% less than the main coffee shop chains. A 12-ounce cappuccino or latte retails for £1.85, a bacon roll is £1.85, a pot of tea is £1.50 and a muffin is £1.15.
CEO Ken McMeikan said: "Greggs Moment is unique in offering customers the ability to choose their great-tasting, fresh food and drink ’just how you like it’, all at incredible value prices that are much more affordable for today’s cash-strapped customer."
According to British Baker’s BB75 tracker, updated in August, Costa had a total of 1,257 stores in the UK, while Starbucks had 730. Mintel consumer research, published earlier this year, found that 57% of people visit coffee shops, with 27% of people having visited Costa in the past three months. Cappuccinos, lattes and mochas are chosen by half of people, while around a quarter order a sandwich or panini. The market was worth around £1.2bn in 2010, according to Mintel.