Interview Synopsis

Greggs – Q2-Q3 2021 trading update & footfall trends

  • Public Equity
  • Consumer
  • Europe

Greggs has experienced a turbulent 18 months. In tandem with economic disruption and Brexit, the shift to remote work is leaving many city and town centres emptier than usual. However, there are some bright spots for the UK chain, as an Interview with a former divisional head from the company illuminated.

Is Greggs back on a roll yet?

While the pandemic was “a real hit” and sales are still down somewhat, drive through and delivery sales have strengthened. The market in general is still “circa 20% down still on where we were in 2019”. Depending on vaccinations and virus mutations, however, business could return to something approaching 2019 levels by the end of this year.

Moving on to industry trends, the specialist highlighted a number of key influences, which were apparent pre-COVID but still relevant. Among these were meat reduction and veganism, “which, for some people, is a health driver. For others, it’s environmental reasons, and I guess some, it’s a bit of a buzz thing, people buy it to try it.”

Looking into the potential growth trajectory of Greggs, the former head believes that its plans to reach 3,000 stores is not just achievable, but it could also go beyond it. “There are big parts of the country where the brand isn’t fully penetrated”, the specialist said, pointing to the southwest and Cornwall in particular.

In addition, the company has been able to take advantage of smaller chains going under. “From a Greggs point of view, [this is] a business that has always made a profit up until this last year, has always been fairly  prudently run financially. Never taking on lots of debt, until it had to recently with the pandemic, so structurally and financially in a strong place to be able to capitalise on the opportunity.” 

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