How did Greggs grow into a UK juggernaut?
When John Gregg hopped on his bike in 1939 to deliver baked goods by bicycle who knew he would be on the cusp of creating a British baking juggernaut.
But as it turns out Brits love a sausage roll and following its first store opening in 1951 Greggs the bakers has gone from strength to strength becoming a multi-billion pound institution.
But what has made a bakery so successful…In this article we answer the question How did Greggs grow? By dissecting the key reasons behind Greggs’ rise to the top and its market leading place as a UK institution.
How did Greggs Grow?
Chapter 1 – Efficiency
John’s sons Ian Gregg and Colin Gregg took over the business in 1964 and looked to expand. However, commercial bakeries are not cheap to set-up and a full-size setup required space and plenty of it. Fortunately, Ian happened across a rather well known Italian economist Vilfredo Pareto and his 80:20 principle. The principle dictates that 80% of the effect can be achieved with 20% of the effort and he applied this to the bakery chain. That fresh baked smell can be achieved with small ovens at the back of a shop. With the heavy baking being done off site. Such a strategy allowed for a streamlined and centralised baking process off site which in turn reduced the cost of setting up retail sites with less space, less equipment and less staff required for operation.
Chapter 2 – Acquisition & Branding
Greggs went public in 1984 and as a result raised a significant amount of capital which they in turn used to fuel expansion through acquisition. It’s main competitor in the late 80s and early 90s was the Bakers Dozen chain and with the capital injection of a public listing Greggs solidified its market position through a purchase in May 1994…A purchase which effectively doubled its presence overnight. During the same period Greggs re-modelled its branding. Bringing its many disparate shops together by ditching any suffixes such as “of Gosforth” and “the baker” into a much cleaner and universally recognisable group
Chapter 3 – The pivot
Over the years Greggs have demonstrated a consistent ability to pivot which has solidified its staying power. One of the biggest strategy pivots came in 2013 with CEO Roger Whiteside repositioning the bakery as “food-on-the-go” rather than a traditional “take-home” bakery. This was in response to a somewhat futile battle with supermarkets. Who with their scale were slashing prices for similar quality baked goods to levels Greggs couldn’t compete with.
Smaller pivots with healthier options, vegan options and festive specials have ensured Greggs have kept pace with the competition.
Chapter 4 – The powers of good PR
While the fondness towards the company from staff and customers alike seems to be unforced and universal. Greggs is certainly helped by a well-greased PR and marketing machine. Over the years Greggs has carried out some ingenious PR ploys. From the iPhonesque launch of the Vegan Sausage Roll, to a Valentines day candlelit special dine in event and even a sausage roll Jesus. Greggs’ Tongue-in-cheek marketing has certainly kept people talking.,
How did Greggs Grow, Key Lessons:
- Applying Paretos 80:20 principle to business decisions can often be a great way of focusing on what really matters. Greggs realised that the freshly baked smell was a key to attracting customers in. However, to achieve this they didn’t need to bake everything on site. Instead a few carefully selected items were baked fresh on-site to achieve the customer want whilst the heavy lifting was done off site.
- Flexibility in business is paramount to staying power. In 2013 Greggs realised its core market was being competed away by Supermarkets who could easily undercut them on price. Greggs’ subsequent transition to a food-on-the-go model meant they transitioned to a market leader on price…The rest is history
- PR & Marketing is at the heart of good business and Greggs have managed to fuel their visibility without investing buckets of cash. PR stunts like launching their vegan sausage roll in iPhonesque boxes to all of the biggest news outlets created a buzz. And ensured massive coverage with the media able to engage with a funny and easily shareable concept.
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