greggs case study business gcse

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Greggs: an agile approach to strategy & business model thinking

John Gregg founded his bakery business in 1939, selling eggs and yeast from his bicycle in Newcastle. The business grew, and his son Ian joined his father and mother, selling pies from his van to miners’ wives. They opened their first shop in Gosforth in 1951.

When John died in 1964, the bakery was taken over by Ian, and major expansion began, including the acquisitions of other bakeries such as the Bakers Oven chain from Allied Bakeries in 1994.

Greggs grew to be the largest bakery chain in the UK, home of the bacon sandwich and a coffee for two quid special offer which, disappointingly, is now £2.10 (a friend told me, honestly), famous for pies and pasties and everything you firmly resolved on December 31 would never touch your lips again.

A couple of years ago, Greggs fell victim to adverse PR about its product range and customer base. Oh how the Prêt crowd sniggered into their avocado and crayfish salads. Yet plucky old Greggs just got its head down and kept growing. ‘It’s a northern thing’ no longer serves as an explanation. The patronising notion that Greggs’s popularity is inversely proportional to the nation’s economic fortunes also fails to explain its steady expansion.

Today Greggs generate £1m a week from sales of coffee. It has repositioned the brand from an ordinary bakery-to-take-home to a high growth food-on-the-go entity, meeting changing customer demands and evolving food culture.

A new strategy was introduced in 2013 under CEO Roger Whitehouse, formerly Head of M&S Food, which focused on four pillars: Great tasting freshly prepared food; best customer experience; competitive supply chain; first class support teams.

Whitehouse introduced a ‘restless dissatisfaction’ approach to compliment the traditional business values, ensuring the business would never stand still after recovering from a period of stagnation. He implemented some radical changes, including closing the in-store bakeries, and introducing the ‘Balanced Choice’ range of products with less than four hundred calories, healthier options to the traditional product range.

And it’s worked. Having launched the first vegan sausage roll in January, last week the company announced a 50% rise in profits to £40.6m in the first half of 2019. The business is handing shareholders a £35m special dividend after total sales rose 14.7% to £546m.

In 2016, Greggs weren’t in the takeaway breakfast market but now only McDonalds sells more takeaway breakfasts. With a Fairtrade Expresso, it has overtaken Starbucks to become the third-largest takeaway coffee seller, behind Costa and McDonalds, while only Tesco sells more sandwiches.

So what are the lessons from the success of Greggs changing its business strategy and model that we take into our startup thinking?

1.     Be agile in how you connect with customers

Greggs expects to pass 2,000 outlets this year, 65% are on high streets, with the remaining 35% located in retail and office parks and in travel locations such as railway stations and petrol forecourts. The aim is to change the emphasis of the business so that it is 60% non-high street by the time it has 2,500 shops.

Part of this is having many of its stores open earlier and close later, in order to target those going to and coming back from work, expanding its breakfast menu to suit, and with ‘Greggs à la carte’ stores to open late to 9pm to lure evening takeaway diners.

As well as its new drive-through locations, the company is trialing a click-and-collect service, as well home and office delivery by Just Eat and Deliveroo. They aim to integrate click-and-collect and delivery services with the company’s Greggs Rewards app, which offers free drinks and birthday treats.

Greggs has previously failed with new ideas such as Greggs Moment , a coffee shop-style outlet with seating, and the Greggs Delivered service, which is only available in Newcastle and Manchester city centres, three years after it launched. However, the business is now at a scale where it can experiment without too much risk.

Takeaway: Greggs route to market strategy is to based on expanding their reach to enhance customer convenience, a ‘fish where they swim’ strategy, reducing the barriers between themselves and their customers, uplifting the customer experience and making the ability to connect and purchase convenient.

2.     Build your brand to face your market

Greggs has in recent years persistently bucked the wider trend on UK high streets, where most retailers are struggling to compete as sales shift online and the cost of running stores rises.

In 2013, Greggs began to transition out of the bakery market with the reasoning that it couldn’t compete with supermarkets, switching to focusing solely on the ‘food on the go’ market after discovering that 80% of its business was with that market. They stopped selling bread in 2015.

Greggs has worked hard at getting consumers to think about it as a food-on-the-go chain, developing ideas such as online ordering for collection and home delivery, developing strategic partnerships with their supply chain to focus on the four key pillars of their strategy.

They are more in touch with where the customers are today. It has managed to cater to new markets without being overly ambitious. The builder can still come off the building site and get a hot pasty, but there are also salads. The decor is still recognisable even if it has been upgraded and the older traditional customers still feel comfortable.

Takeaway: Many businesses want profit as their objective. But if you only focus on short-term wins and results, you get distracted from doing the work required to build the skills you need to grow and scale, and it’s the ability to scale that matters. The process is more important than the outcome at early stages of a change of strategy. Focus on getting good before you worry about getting big.

3.     Look forwards, not backwards with your product offering

Greggs sells 1.5 million sausage rolls a week but created the new vegan option due to public demand after an online petition signed by 20,000 people. In recent years Greggs has been innovating within its product range to appeal to a broader range of customers. Its ‘Balanced Choice’ healthy eating range, introduced in 2014, offers options including wraps and salads, all below 400 calories. It also sells gluten-free and several vegan lines.

The company also believes it can take advantage of rising demand for food ‘customisation’, driven by allergies and ‘food avoidance’ preferences, and its stores now make sandwiches to request.

One in eight new customers have bought a vegan sausage roll in 2019, which has overtaken doughnuts and other pastries to become a bestseller. The traditional sausage rolls remain at number one – with its 96 layers of light, crisp puff pastry – but there are more vegan products in development, including a vegan doughnut. It’s worked, such that Ginsters released their own vegan product for the first time in its 52-year history.

Takeaway: Greggs has been bold in its response to the adverse publicity on its offering and changing food culture. Aligning your product strategy with a focused brand image and route to market is core to any business model.

4.     Be clear about your marketing message & tone of voice

Before the Greggs vegan sausage rolls went on sale, TV presenter Piers Morgan sent out a tweet: Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns. The tone of the company’s response: Oh hello Piers, we’ve been expecting you – friendly but with a slight edge, was perfectly attuned to the ironic, self-confident marketing Greggs has adopted, a James Bond-inspired, droll putdown that was the perfect riposte.

Their hilariously portentous launch video – part of a build-up that parodied the release of a new iPhone model with journalists sent vegan rolls in mock iPhone packaging and stores sold sausage roll phone cases – meant that for days Twitter was engulfed with people talking about a £1 bakery product.

The vegan sausage roll campaign, officially launched to support the Veganuary campaign that encouraged people to give up animal products for a month, followed other memorable promotions include a Valentine’s Day campaign offering ‘romantic’ £15 candlelit dinners in Greggs shops, and a spoof ‘Gregory and Gregory’ event, and one faux pas: a 2017 advent calendar tableau of a sausage roll in a manger. After complaints Greggs apologised and reprinted with a different scene featuring Christmas muffins.

Takeaway: Greggs found its distinctive marketing style in 2012, when it saw off then-chancellor George Osborne’s proposed ‘pasty tax’ on hot takeaway food. Since then it has been consistent in its purposeful, structured and memorable content driven communication strategy, making the brand relevant to its target audience and differentiating its offering in an increasingly competitive market to reposition the brand.

5.     Don’t let your business model become stale

Innovation can be about efficiency. Look at Ikea, and The Billy bookcase. It’s a bare-bones, functional bookshelf if that is all you want from it. The Billy isn’t innovative in the way that the iPhone is innovative. The Billy innovations are about working within the limits of production and logistics, finding tiny ways to shave more off the cost, all while producing something that does the job. It demonstrates that innovation in the modern economy is not just about snazzy new technologies, but also boringly efficient systems.

The Greggs shop environment has been improved and significant investments made in logistics and delivery systems to make them more efficient and scalable. In-store ordering moved to a centralised forecast and replenishment system rather than relying on shop teams filling in manual order forms, which resulted in order accuracy and improved availability for customers.

All shops are on a refurbishment programme (every seven years) to ensure they stay looking bright and welcoming. In-store point of sale and window displays remain key to Greggs’ marketing strategy, however, a loyalty app was also introduced.

Takeaway: innovation in Greggs is about efficiency, economy and effectiveness, searching for ways to make their products even better and affordable for their target market. A ‘back to basics’ focus on the business model reflects the culture and humility of the brand. Combined with brave decision making to implement change and execution in a consistent, simple and continuous manner has delivered the results.

6.     Ensure your folks keep clear heads

Amidst the hullaballoo and the fury of the frantic activity in the coming and going of customers at busy times, staff have to keep a clear head. In the heat of the moment, they cannot get caught up in the intensity and frenzy. Resilience in times of peak demand is needed to keep the customer experience as fresh and stimulating as the steak bakes.

When you go to a Greggs, the staff are so engaged in what they do its untrue, they are like whirling octopus serving customers, and they do it with good humour, bantering with regulars, enjoying the success of seeing returning customers, before going again.

With 10% of profits going to the Greggs Foundation to help fund Breakfast Clubs for children and over £1m raised annually for Children in Need, the vegan pastry has helped change the perception of Greggs, but fundamentally it’s a people business, about delivering service, experience and the community it operates.

Takeaway: So, focused on a simple, core value proposition – reasonable quality food at reasonable prices, consistently produced and scaled – but the fundamental premise is to make customer experience the brand differentiator.

Many takeout food companies are head-on competition to Greggs, but due to its focused marketing strategies highlighting choice, quality, nutrition & easy access, the company is able to create sustainable advantage.

Changing lifestyles, changing eating habits and increasing health awareness factors are affecting the growth of the companies in this industry. Greggs has set its strategy from a customer’s point of view and with customer-based insights, to ensure the business model is as robust as it can be.

Adopt Greggs’ agile approach to strategy and business model thinking, to focus on the horizon and hold your vision. Do something everyday to move your business forward, and that makes you stand out from the crowd. A sheep has never stood out from another sheep, so don’t follow the herd blindly. People will take notice.

Ian Brookes

John Gregg founded his bakery business in 1939, selling eggs and yeast from his bicycle in Newcastle. The business grew,…

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Edexcel A2 Business Unit 4a - Greggs Case Study Analysis

16th March 2014

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20 GCSE Business Case Studies

Subject: Business and finance

Age range: 14-16

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18 February 2024

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20 High Quality Business Case Studies from Around the World.

Each Case Study introduces the business, provides lots of theory slides and tasks, ends with an application exam style question (with example answers) and also inclides keyword flash cards specific to each case study and the skills/theories learned.

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Best printed on A3, "Business in Context" gives learners an opportunity to read about about discuss a real business scenario. This resource is ideal traning for section B questions of the OCR GCSE Business Studies exam and content relates solely to the Business 2 specification.

This is a second resource focusing on Greggs. The scenario in the centre is factual and slightly different to part 1. The resource includes a teachers' notes sheet to point learners in the direction of some potential responses.

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Business Case Study & Questions - Greggs Part 2 (OCR Business 2)

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Edexcel business Unit 4A Greggs case study

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Greggs case study: building back better with new Fairtrade commitments

Greggs are a long-standing and unique partner with Fairtrade in food-on-the-go retail.

Greggs and Fairtrade: a success story on-the-go

The partnership started in 2006 when Greggs introduced Fairtrade coffee. It has since gone from strength to strength.

Read the interview with Malcolm Copland, Greggs’ commercial director.

Greggs’ Fairtrade commitments now include:

• Coffee beans
• Apple juice
• Orange juice
• Sugar sticks
• Sugar syrup
• Hot chocolate

Over the last 17 years, Greggs have generated over £6.1 million in Fairtrade Premium for farmers and workers across their supply chains, from sales of coffee, tea, hot chocolate, fruit juice, sugar, cookies, and bananas. In 2021 alone, Greggs generated £1m in Fairtrade Premium for farmers and workers.

The Greggs Pledge

Greggs’ commitment in 2021 to sourcing its chocolate from Fairtrade forms part of the company’s sustainability plan, The Greggs Pledge. This pledge supports Greggs’ commitment to sourcing sustainably and having a robust Responsible Sourcing Strategy in place by 2025.

Start a conversation. They’re nice people at Fairtrade. Malcolm Copland, Greggs’ Commercial Director

The pledge, launched in February 2021, sets out the company’s 10 commitments to help make the world a better place by 2025. These commitments are aligned with the ambitions of the United Nations Sustainable Development Goals (SDGs).

This has a hugely positive impact for cocoa farmers as it supports improved household income, helps track climate change, and strengthens women’s empowerment.

Interview with Malcolm Copland, Commercial Director at Greggs

Malcolm Copland, Commercial Director at Greggs, spoke to Fairtrade Foundation’s Will Browning, Head of Partnership Development, about the success of the partnership.

Will: Can you tell us how things have been for Greggs during the pandemic and about your decision to go ahead with your commitment despite the bleak environment? Malcolm: When it came to the values of the business, protecting our people was key, but we also wanted to rapidly progress with some of the plans we had in place and the work that we were doing with Fairtrade. It was important for us to accelerate the plans into chocolate. We were delighted to be able to do that for our supplier partners. Will: Why did Greggs first start working with Fairtrade? Malcolm: It was very much about our values, particularly around providing quality products and doing the right thing as a business. At the time, we were entering into the coffee market and we wanted to ensure that we could deliver something back in the supply chain. Because it was an independent certificate, Fairtrade enabled us to demonstrate that we were treating farmers fairly. And that’s why the certification was very important to us; because it reflected the values of the Greggs business, developed 86 years ago.

Through the Greggs Foundation with our breakfast clubs and what we do within the communities where we operate in the United Kingdom, there was a great synergy. Will: What you are most proud of since you first started out on your Fairtrade journey? Malcolm: I’m proud of being Fairtrade’s strategic partner for food-on-the-go when it comes to Fairtrade Fortnight. I’m also proud of working on collaborative marketing campaigns to highlight the benefits of Fairtrade to our customers and communities.

The things that personally have touched me, are that we’ve had farmers coming into Greggs. They have met our retail teams and our Board.

I remember a couple of female farmers talking about what Fairtrade has meant to their communities and to them personally – in terms of the social equity. And how it has transformed their lives and the lives of their families. That was important to us to hear first-hand. And I think has really impacted us very strongly in terms of doing more with Fairtrade across more categories as well.

It makes the hairs at the back of my neck stand up thinking of how impactful it was and how it touched so many people. Malcolm Copland

The second highlight was when our retail team went to meet some of the farmers. We then brought the story back into the Greggs annual conference. Seeing on the big screen the story of the team meeting the farmers and listening to what Fairtrade meant to them. I really don’t think there was a dry eye in the house.

And to this day it makes the hairs at the back of my neck stand up thinking of how impactful it was and how it touched so many people. These things have made such a big difference in terms of making it real for people. These things have made such a big difference in terms of making it real for people. Will: In 2021, Greggs launched The Greggs Pledge, which includes 10 commitments to make the world a better place by 2025 and beyond. Which of these commitments does Greggs’ partnership with Fairtrade contribute to?

Malcolm: The pledge is very much about our commitment to the planet and communities. We publish our progress against our 10 commitments every year. Fairtrade, we think is key to a number of them. We are committed to growing breakfast clubs and supporting our communities.

Equally, on what Fairtrade does – our coffee commitment means farmers are better equipped to put food on the table for their families. The commitment to reducing food waste is another. Working with our partners across the Fairtrade commodities is key for us in terms of efficient supply chains and ensuring that there’s less wastage. Our commitment to carbon neutral is key and we are collaborating with all of our partners on that. And I think that when we look at building shops in the future, we want our customers to be immersed as well. The shops of the future will enable us to communicate more about Fairtrade. Finally, embracing diversity. We talked already about social equity, the work we’re doing with female farmers, on empowerment and education. That for us is very, very important within Greggs and in our supply chain. All of this goes into our commitment on sustainable procurement as well. Will: What would you like to say to farmers in your Fairtrade supply chains? Malcolm: First a thank you. Thank you for the dedication they have to their profession. They’re obviously working very, very hard to develop themselves and to reinvest back into the communities and back into the profession as well.

Higher farmer standards are fantastic, it means a better-quality product for us. And it also means that we have a better understanding of the supply chain in terms of our carbon footprint.

Their hard work is very much appreciated. Will: How would you like to see the partnership with Fairtrade evolve in the future? Malcolm: Both of our strategies are embracing initiatives on specific themes such as climate, social equity, right to livelihood – which can strengthen the brands’ sustainable sourcing goals. Also to continue to develop a wider impact to ensure a just transition to a low carbon society across our complete supply chain. And making sure the farmers and growers associated are involved in carbon reduction and remain resilient to climate change. Will: And finally, what would you like to say to the rest of your industry about Fairtrade and working with Fairtrade? Malcolm: I think that it would be a great thing to start the conversation with Fairtrade. To really understand the certification and the process. And beyond the certification, in terms of the strategy of where Fairtrade is going beyond 2025 and how that that can support them in their journey, and their strategy.

So, start a conversation. They are nice people at Fairtrade.

Article correct as of July 2022.

Tate & Lyle: Fighting child labour with Fairtrade

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