Greggs chief executive Roisin Currie talks inflation and prices rises, looking at former Carpetright and Ted Baker stores, winning share from the fast-food giants and whether the Euros and Olympics have prompted an uptick in spend
After posting its interim results for the 26 weeks to June 29 – in which total sales jumped 13.8% to £960.6m and group underlying profit before tax jumped 16.3% to £74.1m – Greggs chief executive Roisin Currie was in a buoyant mood.
Speaking this morning, she touched on several topics facing the industry, including falling food inflation, price rises, winning customers from the fast-food giants like McDonald’s, and what positive effect the summer of sport is having on customer behaviour.
You’ve increased the prices of some items by 5p in recent weeks – can you give some details about what products have increased in price?
“It’s been a very small price rise, and we’ve protected all of our meal deals. You’ll have seen the price of baked goods have gone up by 5p; the price of sausage rolls has gone up 5p. And then on a few sandwiches, they’ll have gone up by 5p.
“But it’s been across a very small number of products and it’s a very small price rise that was pushed through. There are no plans for any future price rises for the rest of this year.”
Are you still seeing pricing pressures on consumers – are they still choosing to eat at home more than going out?
“I think if you look at all the indexes out there, it says that consumers have more confidence and more disposable income. Since the pandemic, consumers are really savvy and are shopping for value. That’s not changed. They really want to make sure that for the money they spend, they get the best value possible.
“Our proposition is very much about meeting the food and drink needs of the customer on the go. So, if you’ve left the house on your way to work and you haven’t had breakfast then we’re offering a really compelling proposition for you to pop into Greggs and get what you need at a great price point.
“Because of our strong value proposition, we are making sure that we serve those needs. But I think value is staying uppermost in the mind of the consumer and I can’t see that changing any time soon.”
There have been a few retail failures of late with the likes of Ted Baker and Carpetright – any interest in the vacant stores left over from those closures?
“That will depend on where we’re looking at expanding. If the stores are in areas where we are underrepresented, places like retail parks, roadsides, travel locations. If there was a retail park that one of those units was previously on and was the right size for us, then absolutely we’d look at all opportunities.
“I’d imagine the Carpetright stores are probably of significantly bigger size than a usual Greggs store would be. But it’s interesting because the catchments are constantly changing in terms of the different operators that our there.”
Have you seen any uptick from the Euros or wider summer of sport?
“We have obviously tried to make sure that we offer opportunities, particularly through our digital channels, around those sporting events. We offered promotions with our delivery aggregators around goals being scored in the Euros by the home nations.
“Similarly, we’ve put some deals and promotions on as part of the Olympics. We’ve got sports bundles that people can buy into, again through our delivery channels, which I think better lend themselves to these sporting occasions.
“With football or the Olympics, it’s like the economy. When its going well, people are happier and as a result I’m sure they’re out there spending a little more and we all get the benefits.”
Greggs is beating McDonald’s in the UK for breakfast. Is the goal with the new pizza ranges to beat the likes of Domino’s in the evening?
“Pizza is very important for us. We are now competing across all day parts, competing in the total food-to-go market and therefore we’re offering the breadth of range for our customers. Everything from hot and cold sandwiches through to pizzas, bakes, salads and indulgent treats.
“That means we’re competing with just about anywhere you can go and across every meal: breakfast, lunch or something to eat in the evenings. So, I wouldn’t say it’s just the pizza. I think we’re more focused on any of the food-to-go operators and trying to encourage our customers with the quality, taste and value proposition that we offer.
“I wouldn’t single out one competitor. I think it’s actually broader, which makes it much tougher and means our marketing team needs to work really hard to make sure we get that brand awareness out there.”
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