Specialist
Former executive at Greggs plc
Agenda
- Footfall trends within the UK’s food-to-go market, touching on Greggs (LON: GRG)
- Cost drivers and margin impacts
- Price dynamics – increases amid inflation and competitiveness with competitors such as McDonald’s (NYSE: MCD) and Tesco (LON: TSCO)
- Growth opportunities across categories, offerings and store footprint
Questions
1.
Could you highlight some of the key trends you’ve noticed within the UK food-to-go market over the past 18 months? Obviously, coronavirus would have had a big impact. What are you noticing as we emerge from the pandemic?
2.
Do you expect the menu size and range reduction you referenced to unravel and reverse as we move into a post-coronavirus environment, or do you think these new reduced menus are here to stay?
3.
Have we seen footfall trends return to pre-coronavirus levels? If not, when do you think this might happen?
4.
How do you contextualise like-for-like growth over the next 3-9 months, given the environment the UK is in at the moment?
5.
How has the cost inflation environment impacted Greggs and the wider UK food-to-go industry?
6.
Are there any product categories within the Greggs portfolio that you think might have pricing power and price could be passed through with a bit more ease?
7.
How much room is there for upwards price adjustment for Greggs, given it operates in the value segment? Does the company have a lot of elasticity and flexibility with price, or would you expect a decline in volumes if there are subsequent price movements?
8.
Who are the key competitors that Greggs prices itself against?
9.
How do you see market share evolving for Greggs, considering where the company prices itself and what might be coming through on the cost and price side? Do you think it could catch some market share from some of the more premium retailers, given its value offering, or do you think it might lose out to some of the more value players such as McDonald’s?
10.
How do you foresee gross as well as EBIT margins progressing for Greggs over the next 12 months?
11.
Greggs’ management believes the TAM for Greggs stores might be about around 3,000. How reasonable do you think this estimate is and do you think it’ll ever be able to reach this size?
12.
What are Greggs’ criteria for opening new stores? Does it come down to population, income per capita and/or competing stores?
13.
What’s your outlook for how Greggs’ store format or concept might develop over the coming years? We’ve seen the company slowly adapt the stores, and there are a lot of drive-throughs at the moment.
14.
On Greggs’ current store footprint, how do you assess the quality of the estate? Is there any risk to additional CAPEX in the coming years that we should be aware of, whether it be for increased technology or refurbishment?
15.
Is there anything that might prevent Greggs from achieving its ambitions to reach 3,000 stores, or are there any risks we should try to factor in?
16.
You mentioned Greggs wanted to eat into the evening trade. How successful do you think Greggs will be in attracting evening customers and how easy is this? Do you think this is a potential growth avenue for the company, or do you think it’s a bit ambitious?
17.
Might Greggs be looking at any points of interest or success to find its feet in the evening time, or does it seem to be quite a far way off?
18.
Are there any other aspects of Greggs’ range or strategy that you think is either really promising or perhaps too ambitious and we should be thinking of on both those sides?
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