Greggs: Food on the Go. Is it all about the food? Greggs, the Bakers, had long been the classic high street family busin
Posted: Sun Apr 17, 2022 6:58 pm
Greggs: Food on the Go. Is it all about the food?
Greggs, the Bakers, had long been the classic high street family
business, loved for its fresh
bread smells and even more for catering to the British love of a
hot sausage roll.
Analysts suggested Greggs was increasingly losing out to consumers
who would rather
spend their cash at coffee shops such as Costa and Starbucks. Both
of these managed to
do the opposite to Greggs and continued to grow store numbers
throughout the recession of
2008. Also, the fresh bread market had now been decisively entered
by the supermarkets
with their economies of scale and ability to use products as
attractive loss leaders. They had
realised that fresh bread smells attract customers and could sell
it more cheaply than
Greggs, the Bakers.
Enter Roger Whiteside
Roger began his career at Marks and Spencer, where he spent 20
years, eventually
becoming head of its food business. With his thinking that Marks
and Spencer had no
ambition and was missing out on the opportunities the internet had
to offer, he was then one
of the founding team of Ocado, the online grocery store. From 2004
to 2007, Roger took on
yet another challenge, a successful turnaround as Chief Executive
of the Thresher Group,
an off-licence chain, which had to be repositioned in the market.
Roger was appointed as
Chief Executive of Greggs on 4 February 2013.
After joining, Roger went straight into a store and shadowed the
manager to understand the
business better when he joined. According to Mintel data, the UK
launched more plantbased
food products in 2018 than any other nation. This could have been a
challenge for a
baker specialising in meat patties. However, news reports suggest
that Roger Whiteside
became vegan as well, and Greggs started developing an
ever-increasing vegan menu. The
same year he came up with a 5-year plan to end Greggs’ heritage as
a baker and to move
into ‘food on the go’. This was essentially selling affordable and
freshly made takeaway
snacks from the eternal sausage roll to new innovative products
such as their famous and
market-leading Vegan sausage roll. All this involved ‘taking Greggs
to where our customers
are, making sure our shops are open when they need them and that we
offer modern
attractive shopping environments’.
This plan initially involved closing 79 in-store bakeries, cutting
over 400 jobs (none forced: all
through natural transition and voluntary redundancy in line with
the firm’s family and caring
image) and completely updating its supply chain in the process. The
strategy also involved
refreshing the Greggs brand and using marketing to position itself
more as an alternative to
McDonald’s and Starbucks than your local bakery. However, in 2020 a
new challenge hit
Greggs. An acute shortage of truck and tanker drivers has led to a
petrol supply crisis, and
many supermarket shelves remain empty.” Julie Palmer, a partner at
the business recovery
firm Begbies Traynor, said: “Like many businesses, Greggs now faces
the harsh bite of the
supply chain crises. However, the baker may have been more prepared
than most
competitors as it stockpiled ingredients and equipment from 2019;
its early actions may have
seemed extreme at the time but will now help it shake off some
supply chain challenges
others are facing.”
Greggs have the ability to move stores as 94% of stores are leased,
so it can close and
move fast to a new location. In 2022, Greggs is planning to open
150 stores. In February
2022, the UK National rail started offering Free Greggs breakfast
to commuters in an English
borough to boost passenger numbers.
As Roger Whiteside approached retirement age, the company’s Retail
and Property Director
Roisin Currie is appointed to be the next CEO, to be effective from
the date of the
Company’s Annual General Meeting in May 2022. “In the interim
period pending
appointment as Chief Executive, Roisin will be appointed as CEO
Designate and as an
Executive Director with effect from 1 February 2022.”
According to Greggs’ CEO succession announcement document, “Roisin
currently holds the
position of Retail and Property Director, with responsibility for
Greggs’ retail operations
across the UK and its central support team. Additionally, Roisin
leads the development of the
Greggs shop estate and its growing delivery business, in
partnership with Just Eat. As a
member of the company’s Operating Board, she has played a key role
in the development of
the strategic plans set out last year. Prior to joining Greggs in
2010, Roisin worked at Asda
where she held People Director roles responsible for the
organisation’s retail and distribution
operations. She is a trustee of the Greggs Foundation and is Chair
of the Employers Forum
For Reducing Re-offending.”
It is a critical period for Greggs where they plan to double their
revenue by the year 2026
and the new CEO would have to play a vital role to achieve this
target.
1- would you please help in diagnose the strategic
issue.
2- Provide PEST, SWOT and value chain analysis.
Greggs, the Bakers, had long been the classic high street family
business, loved for its fresh
bread smells and even more for catering to the British love of a
hot sausage roll.
Analysts suggested Greggs was increasingly losing out to consumers
who would rather
spend their cash at coffee shops such as Costa and Starbucks. Both
of these managed to
do the opposite to Greggs and continued to grow store numbers
throughout the recession of
2008. Also, the fresh bread market had now been decisively entered
by the supermarkets
with their economies of scale and ability to use products as
attractive loss leaders. They had
realised that fresh bread smells attract customers and could sell
it more cheaply than
Greggs, the Bakers.
Enter Roger Whiteside
Roger began his career at Marks and Spencer, where he spent 20
years, eventually
becoming head of its food business. With his thinking that Marks
and Spencer had no
ambition and was missing out on the opportunities the internet had
to offer, he was then one
of the founding team of Ocado, the online grocery store. From 2004
to 2007, Roger took on
yet another challenge, a successful turnaround as Chief Executive
of the Thresher Group,
an off-licence chain, which had to be repositioned in the market.
Roger was appointed as
Chief Executive of Greggs on 4 February 2013.
After joining, Roger went straight into a store and shadowed the
manager to understand the
business better when he joined. According to Mintel data, the UK
launched more plantbased
food products in 2018 than any other nation. This could have been a
challenge for a
baker specialising in meat patties. However, news reports suggest
that Roger Whiteside
became vegan as well, and Greggs started developing an
ever-increasing vegan menu. The
same year he came up with a 5-year plan to end Greggs’ heritage as
a baker and to move
into ‘food on the go’. This was essentially selling affordable and
freshly made takeaway
snacks from the eternal sausage roll to new innovative products
such as their famous and
market-leading Vegan sausage roll. All this involved ‘taking Greggs
to where our customers
are, making sure our shops are open when they need them and that we
offer modern
attractive shopping environments’.
This plan initially involved closing 79 in-store bakeries, cutting
over 400 jobs (none forced: all
through natural transition and voluntary redundancy in line with
the firm’s family and caring
image) and completely updating its supply chain in the process. The
strategy also involved
refreshing the Greggs brand and using marketing to position itself
more as an alternative to
McDonald’s and Starbucks than your local bakery. However, in 2020 a
new challenge hit
Greggs. An acute shortage of truck and tanker drivers has led to a
petrol supply crisis, and
many supermarket shelves remain empty.” Julie Palmer, a partner at
the business recovery
firm Begbies Traynor, said: “Like many businesses, Greggs now faces
the harsh bite of the
supply chain crises. However, the baker may have been more prepared
than most
competitors as it stockpiled ingredients and equipment from 2019;
its early actions may have
seemed extreme at the time but will now help it shake off some
supply chain challenges
others are facing.”
Greggs have the ability to move stores as 94% of stores are leased,
so it can close and
move fast to a new location. In 2022, Greggs is planning to open
150 stores. In February
2022, the UK National rail started offering Free Greggs breakfast
to commuters in an English
borough to boost passenger numbers.
As Roger Whiteside approached retirement age, the company’s Retail
and Property Director
Roisin Currie is appointed to be the next CEO, to be effective from
the date of the
Company’s Annual General Meeting in May 2022. “In the interim
period pending
appointment as Chief Executive, Roisin will be appointed as CEO
Designate and as an
Executive Director with effect from 1 February 2022.”
According to Greggs’ CEO succession announcement document, “Roisin
currently holds the
position of Retail and Property Director, with responsibility for
Greggs’ retail operations
across the UK and its central support team. Additionally, Roisin
leads the development of the
Greggs shop estate and its growing delivery business, in
partnership with Just Eat. As a
member of the company’s Operating Board, she has played a key role
in the development of
the strategic plans set out last year. Prior to joining Greggs in
2010, Roisin worked at Asda
where she held People Director roles responsible for the
organisation’s retail and distribution
operations. She is a trustee of the Greggs Foundation and is Chair
of the Employers Forum
For Reducing Re-offending.”
It is a critical period for Greggs where they plan to double their
revenue by the year 2026
and the new CEO would have to play a vital role to achieve this
target.
1- would you please help in diagnose the strategic
issue.
2- Provide PEST, SWOT and value chain analysis.