From builders to hipsters: Greggs' calculated recipe for success
It’s rare to see a brand pivot to a new clientele with success. Formerly the epitome of a working class eatery, for Greggs (GRG.L), evolving with the times and not being afraid of embracing previously alien concepts of consumption has been its revenue lifeblood over the last few years.
The move, most notably and recently with the launch of the vegan sausage roll, has been met with mixed responses. On one side you have outcry, from accusations on the attack on the working class as well from fragile media provocateurs, and on the other side, fanfare and appreciation that hot vegan options are now readily available at affordable prices.
It’s hardly surprising the opinion is so split. Alongside being obsessed about weather and class, Brits also enthuse about sausage rolls. Brits love sausage rolls so much that even the terrible (albeit for charity) Christmas number one single for 2018 is dedicated to the favourite pastry.
Greggs is arguably synonymous with the baked good, selling over 1.5 million traditional sausage rolls per week. But where critics fail to acknowledge is that the addition of the vegan option doesn’t replace the meat version, nor does it push up prices, and therefore financially alienating its original clientele — it’s growing its consumer base.
Just roll with it
There are 3.5 million vegans in the UK and according to recent research from supermarket Waitrose, 33% of people have meat-free or meat-reduced diets. January is particularly a popular time for people to try vegetarianism or veganism (the rise of Veganuary, for example), as it’s the most health and weight conscious month of the year.
Tapping into the frenzy is good business sense.
Over the last few years, Greggs has seen its business boom, thanks to it adding healthy options to its platter of beige calorific baked goods. It added flat whites to its menu, overhauled its range of items to include more vegetarian and vegan options, and healthier choices for customers that may not want to eat a pasty that day.
All-in-all it has boosted the group’s fortunes.
It’s latest trading for the eight weeks to 24 November 2018 showed total sales rose 9.0%, company-managed shop like-for-like sales were up 4.5%, and now it anticipates its 2018 full year profit before tax (excluding exceptional charges) to be at least £86m ($109.1m). Other trading updates have revealed consistent rises in revenue growth. It will report its full year results on 9 January.
This all, of course, is keeping shareholders happy as it’s continuing to expand its sales opportunities and profits. Just look at its share price over the last five years.