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Food & Beverage
What is Greggs and what services does it provide?
Greggs is one of the leading bakery chains and food on the go brands in the UK. It has approximately 2,050 shops, employs 23,000 people and has millions of customers nationwide.
The business was started by John Gregg as a Tyneside bakery in 1939. He opened his first eponymous shop in Gosforth, Newcastle upon Tyne in 1951.
Following the death of John Gregg in 1964, the running of the business passed to his sons, Ian and Colin, who had ambitious plans for the company. Through organic growth and acquisition, over the years the business grew into the high street food retailer many of the UK population know today.
In 2019, sales rose 13 per cent to £1.17bn and pre-tax profits were up 27 per cent. In the same year, it opened 138 new shops (45 of them franchises). In total, it has around 300 franchises in the UK, most of which are run in partnership with established service station and convenience store operators.
In 2020, the company expects to open in the region of 100 shops in the UK, 40 of which will be in association with franchise partners.
As well as its bricks and mortar business, Greggs has developed its own rewards app where every time a customer makes a purchase in-store they have the chance to receive free coffee, birthday treats and be entered into exclusive prize draws. The company also offers a delivery service, which was set up in conjunction with Just Eat.
According to Greggs, its food on the go sales account for 80 per cent of the business’ total annual income.
What’s on the Greggs menu and who does the brand appeal to?
Its breakfast menu features baguettes, rolls, fruit pots and yoghurt. Customers can also choose from freshly made sandwiches, pizza, pasta, salads, soup and Greggs’ popular baked products, such as sausage rolls, melts and pasties.
Hot and cold drinks are also available in store, as are crisps, nuts, coated raisins and sweat treats such as brownies, shortbreads, buns, doughnuts, muffins and eclairs.
A nutritional information leaflet is available to customers in all Greggs shops, while shelf edge tickets state the calorie content of every product on display. The company doesn’t use artificial colours, flavours, added trans fats or monosodium glutamate (MSG) in its products.
In January 2019, Greggs launched a Quorn-filled vegan sausage roll to coincide with Veganuary, an initiative that promotes eating a vegan diet for the month of January. It was a big hit with customers, with Greggs reporting that it struggled to keep up with demand at times. More vegan products are in development, Greggs says, as it responds to the increasing popularity of plant-based diets.
At the time chief executive, Roger Whiteside, said: “More people are coming. Awareness of the brand has never been higher and the vegan roll has helped with publicity and encouraging people to come and have a look at what we’re doing.”
When it comes to the sale of hot drinks, Greggs reached a significant milestone in 2019 when it announced it had pulled ahead of Starbucks to become the third biggest takeaway coffee seller in the UK, only surpassed by Costa and McDonald’s.
The brand appeals to customers who require freshly prepared, good value hot and cold food and drinks. Greggs provides a fast and friendly service in conveniently located and modern shops, whether on the high street or in retail parks, shopping centres, office parks, travel hubs or roadside and motorway locations. Recently, Greggs began trialling concessions in five Asda supermarkets.
How does the Greggs franchise model work?
The company works with established franchise partners “in locations where it may be difficult to operate a company managed shop”, including motorway service stations, petrol stations, educational establishments and smaller high street convenience sites.
Currently, Greggs’ franchise partners include Euro Garages, Moto, Wightlink, Blakemore Retail and Applegreen. Greggs began franchising in the UK in 2012 when it signed a multi unit agreement with Moto.
In March 2020, Blakemore Retail, which runs 280 stores in England and Wales, opened a standalone Greggs next to its Spar store in Staplehurst, Kent. The new initiative forms part of Blakemore Retail’s strategy to grow food sales by creating a vibrant food to go hub in Staplehurst. Feedback from customers has been positive.
Greggs says all franchise partners work with a clear set of policies and processes to ensure that wherever the brand operates, customers receive the same high quality products and service across all its 2,000 plus shops.
They benefit from the company’s high profile brand name and considerable experience in the food and bakery industry. As part of the franchise package, their managers and staff are given comprehensive initial and ongoing training in all aspects of the business, access to its tried and tested method of operation, help with shop fit out, plus assistance with the development of the franchise and its food and drink offering. Expert start up and ongoing support is also provided in order to maximise sales and return on investment.
What kind of franchise partners is Greggs looking for?
The company is looking for what it describes as “corporate” partners who have the capability to open at least 10 shops during an agreed period of time. Currently, Greggs does not offer single unit franchise opportunities in the UK.
What skills and experience are needed to become a successful Greggs franchise partner?
Experience of running similar multi unit franchise operations is helpful, as is the ability to site Greggs shops and concessions in locations the company is currently targeting for expansion. Sufficient funding is also a must.
Successful multi unit franchisees are ambitious, driven, possess good management skills, have the ability to delegate effectively and have a sound operational and reporting structure in place. They are also prepared to build a business over a number of years in order to benefit from economies of scale in the long term.
Multi unit franchising is increasingly popular in the UK, with the 2018 British Franchise Association NatWest industry survey revealing 36 per cent of franchisees run businesses with multiple sites.
What locations or territories is Greggs looking to operate in?
The company has franchise opportunities available throughout the UK.
Where in the UK is the Greggs franchise based?
Greggs’ UK head office is in Newcastle upon Tyne.
Why is Greggs a good investment?
It’s a combination of an established, forward-thinking brand that has wide consumer appeal with a food industry sector that looks set to enjoy considerable growth.
The latest figures from market research company IDG estimate that the UK food on the go sector will be worth £23.4 billion by 2024 and between 2019 and 2024 will grow by 26.5 per cent, more than double the growth expected in the wider food retail sector, which is predicted to rise by 12.5 per cent during the same period.
While the Greggs franchise proposition looks appealing, it’s important that potential investors conduct in-depth research into any franchise and consult business and financial experts familiar with franchising before parting with any money or entering into a legally binding agreement with a franchisor.
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