Greggs’ record annual profits off the back of a bold food-to-go strategy gives any bakery pause for thought. British Baker takes a look at the key factors which give the high-street baker its competative edge.
There can be no doubt that Greggs is very much a Roger Whiteside company now. The seasoned veteran had a vision for Greggs, and a family bakery chain wasn’t it. He has been clinical in changing the company over to its food-on-the-go mantra, streamlining in any way possible. His moves have firmly cemented its position as a rival to the likes of Costa, Starbucks and Subway. Last year he spoke about how the UK customer had been in love with Greggs for a long time – and how the company needed to give something back.
Greggs still does cakes. It still does pies. But it has recognised the prevailing winds and has been quicker than some of its rivals to put in healthier options. Its Balanced Choice range is selling well, and it was recognised for its work in this area with a 2015 IGD Health and Wellness award. Commenting on this, Greggs says: “Success this year has come from range of extensions, including soup and salads, ‘heat to eat’ sandwiches and ‘no-added sugar’ soft drinks.”
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Greggs has been running its £2 breakfast deal for six years now and, last year, introduced any sweet or savoury product and a hot drink at the same price point. The consumer has responded well to these deals. They have almost become iconic on the high street.
As part of the Whiteside mantra, the company has also worked hard to get its back office systems to where they need to be. In an interview with British Baker last year, just near St Paul’s, the chief executive admitted he had no idea what the stock would be in that shop at that time, and that the company would be working towards changing this. In its preliminary results for the 52 weeks to 2 January, 2016, the company has admitted it has introduced SAP as its core enterprise resource planning system. And it added: “We are well advanced with plans to bring our existing finance processes into SAP in the first half of 2016. This will provide the platform on which we will build a suite of capabilities across logistics: procurement, product life-cycle management and centralised ranging, forecasting and replenishment.”
Yes, Greggs has announced the closure of three bakeries and some 355 jobs look set to go – but at the same time the company has announced a £100m investment as it moves from a decentralised bakery business to a ‘centrally-run modern food-on-the-go brand’. Putting it bluntly, Greggs has big plans. It thinks that by operating smarter it can grow even bigger via improved supply chain logistics, meeting consumer product need and without a reliance on the high street. All of this, it would appear, can also become a reality with a smaller number of production sites.