Hey Hot Potatoes,

Welcome to the latest edition of the Hot Potato Newsletter. Now, is it just me who thinks it’s hilarious to walk into a Greggs bakery and ask if Gregg is in? Yep, it is probably just me. Anyway, in today’s edition we’re focusing on our nation’s favourite bakery, Greggs. A brand that has truly become a permanent addition to almost every high street in the UK, with close to 2,500 stores and growing. Each store on average produces 1,500 sausage rolls a day, which means across the UK there are over 3,500,000 sausage rolls produced daily… ridiculous numbers!

That being said, it hasn’t always been sausage roll galore, in fact back in 2012 the brand was facing negative quarter on quarter sales, profits were shrinking and shareholders were questioning the future of the brand. So how did Greggs go from doughnut distress to steak bake sensation? Well in this edition we take a look at how Greggs turned it around and became the definition of success.

In today’s email: From doughnut distress to steak bake sensation, how Greggs became a success story.

Read Time: Approx 6 mins

Pivoted Model

Source: Marketing Week

Picture this, it's 2013 and Roger Whiteside steps into the CEO role at our favourite Geordie bakery chain. However unlike most of us, who would be diving straight into the steak bakes, Roger was cooking up something bigger in his mind.

While Greggs was busy battling it out with supermarkets over who could sell the cheapest loaf (spoiler alert: not the best game plan), he saw a bigger slice of the pie; the food-on-the-go market.

As Roger put it, "there's hardly any butchers, bakers or greengrocers anymore and that's because of the supermarkets. I looked at our shops and thought why are we baking bread and why do our shops look like bakeries?" Talk about a light bulb moment… Suddenly, Greggs wasn't just eyeing up the local bakery competition, they were setting their sights on the Starbucks and McDonald's of the world.

As painful as it can be, change is something that needs to happen to allow for growth. So when Roger decided they would pivot and change their model, they initially had to close 79 stores, cut 400 jobs and overhaul their supply chain. So much so that for the financial year ending in 2013, Greggs saw pre-tax profits fall by a colossal 37% and shares dropped by up to 10%… pretty painful stuff.

However as with everything in life, perseverance is paramount, and just a few short years later, Greggs slowly started morphing into the powerhouse that it has become today. By 2017, Greggs saw their sales grow by 7.3% to £453m, and that was only over the first half of the year. Profits were up too by 1.8% and since then? Well, let's just say Greggs has been on a roll (alright no more puns!).

Expanded Offering and Expansion Plans

Source: Insider Media

Choice is important and Greggs certainly recognises this! By expanding their menu, increasing trading hours and leveraging digital channels, Greggs has found that ‘choice’ is one of the key ingredients to their success.

Key Points:

1. Broader and healthier menu: Historically, when people would go to a Greggs, it was traditionally a ‘pork fest’ as described by Roger Whiteside. The menu was pretty one dimensional, notorious for bacon sandwiches and sausage rolls. Now if you find yourself in a Greggs, the options are far more varied and believe it or not, you’ll even find a salad and some porridge on the menu. Their aim now is to increase the number of ‘healthier choices’ on their menu by 30% by end of 2025. Choice is good and healthier choices are even better.

2. Longer trading hours: Greggs has historically been seen as a breakfast and lunch spot, but now over 1,200 of their stores are open until 7pm or later. This means they are now catering for three eating occasions over a day and simply put, the longer you’re open, the more sales you’ll do.

3. Digital channels: Modern times call for modern measures, and Greggs is certainly embracing the digital world. The two key areas they have been focusing on are click and collect and delivery. Both options make it more convenient for customers to get a Greggs; whether they are ordering ahead of time on the app to skip the queue, or are getting a delivery to nurse their hangover in bed on a Sunday morning, these digital channels are helping drive more orders.

4. Ambitious expansion plans: Greggs has an ambitious plan to have more than 3,000 stores in the UK. The bigger their estate, the more customers they reach and the more sales they drive. Simple!

All factors mentioned above have one thing in common, they are making it easier for the customer to choose and order from Greggs. Ultimately convenience is what customers are looking for, and if you can make it easy for the customer to purchase your offering, then you will drive more sales.

Genius Marketing and Emphasis on Loyalty

Source: Greggs / Marketing Week / Famous Campaigns

There’s no better way to connect your customers with your brand than clever marketing… oh and the all important customer loyalty.

Key Points:

1. Bold but effective marketing campaigns: Greggs just seem to nail it every time when it comes to marketing. They’ve launched so many campaigns that have been very well received… From Lewis Capaldi doing a shift at a local Greggs, to creating a Greggs ‘concierge’ black card featuring the likes of Ed Sheeran and Stormzy. Greggs then went undercover as ‘Gregory and Gregory’ at a gourmet food festival. We’ve even seen Greggs merch come to Primark! All great campaigns that have helped build their brand and make them the talk of the town.

2. Slick PR: It seems the Greggs PR team always have their finger on the pulse, a notable example includes the creation of their vegan sausage roll after a PETA petition. The creation of this vegan delight not only annoyed Piers Morgan, but gave the PR team another story to use to their advantage. Their slick PR makes them relatable to a lot of people and brings out their personality, which is another great way to build their brand in a positive way.

3. Leveraging loyalty: Now for those of you out there who have actually been reading these newsletters, (thank you by the way, I don’t say it enough), I’ve mentioned customer loyalty a few times and for good reason. Greggs see customer loyalty as a key driver of their growth; over the second half of last year, 13% of all transaction came through their app vs 10% in the first half of the year. Free birthday treats and rewards for spending are keeping customers loyal to the brand.

Greggs are not only experts at making sausage rolls, but they are arguably experts at resonating and connecting with their customers through clever marketing, PR and loyalty programs. And don’t worry, I’m not saying you need to hire Lewis Capaldi for a shift, but think about how you can start connecting to your customers more by being creative with your marketing, get your customers to buy into YOU and your brand.

Value Proposition and ‘The Greggs Pledge’

Greggs is not just a brand that sells food and drinks, it is becoming an integral part of the community. In 2021 they launched, "The Greggs Pledge", described as "our commitment to ourselves, our customers and our communities to make the world a better place by 2025."

Key Points:

1. Greggs outlets: There are now 35 ‘outlets’, which sell Greggs products at discounted prices. Any unsold food from Greggs shops is taken and sold at the outlets the next day. There are two aims, one is to reduce food waste and the second is to allow people in disadvantaged areas to enjoy Greggs at a discounted rate. Kind to the planet and kind to humans, a win win!

2. Breakfast club: Greggs aims to support 1,000 school breakfast clubs by the end of 2025, having pledged to provide 70,000 free school meals a day. You can’t argue with helping the community, and more importantly providing a much needed free meal for school kids across the UK.

3. Positive impact on the environment: By the end of 2050, Greggs aims to be a fully carbon neutral business and use 100% renewable energy across all areas of the business. They have also pledged to reduce their packaging by a further 25%, highlighting the importance they feel in doing their bit for the environment.

For me, I see monetary and financial success, which is great, but I also believe a big measure of success is the extra mile you go as a business for people, communities and the environment. Making a positive impact in communities is something every business should look to do.

Today, you’ve hopefully learnt a bit more about Greggs and what has driven them to see success after some tough years around 2012. What’s one thing you’ve learnt about our beloved British bakery chain that you didn’t know before?

Next week the time has come to put a face to the name. I entered the thirties club yesterday and am feeling more motivated than ever to bring Hot Potato delights to your inbox plus so much more. Catch you next week HPN friends!

Bon appétit,

Max Shipman, Editor-in-Chief, Hot Potato

P.S. Don't forget to add us to your safe senders list to ensure you don't miss out on any of our tasty content.