.At the start of 2020, Greggs was very much the darling of the business world.
The Newcastle food company had seen a seven-year programme to transform its business paying off in the form of record results, a special dividend for shareholders and a one-off payment for its 25,000 staff. A long-held target was reached as the company鈥檚 2,000th store opened in South Shields, leading it to raise its sights higher and aim for 3,000. Meanwhile, Greggs鈥 all-conquering social media presence saw stars lining up to be associated with its coolness.
Fast forward 12 months, and after a year like no other, Greggs was telling a different story. Last week the company reported a 拢13.5m loss after a year in which it had to make 820 people redundant and saw many of its stores having to shut during local and national lockdowns.
Ahead of those results, a number of analysts had questioned whether there was even an 鈥渆xistential threat鈥 to Greggs as fewer people work (and get lunch) in city centres. One suggested that customers wouldn鈥檛 want to pay for lunch having been making their own for the last year.
But within those results 鈥 which contained the company鈥檚 first loss in more than 30 years as a listed company, and possibly ever 鈥 Greggs was not just bullish for its future but revealed a number of signs that point to its recovery already being in train.
Saying that it will open around 100 stores this year, chief executive Roger Whiteside also outlined how it was planning to serve more food in the evenings and had benefited from having to accelerate digital services such as delivery and click-and-collect.
The pandemic has also offered opportunities. In a week when chocolatiers Thorntons said it would close all its stores 鈥 and after the likes of Debenhams and Top Shop also disappeared from the 海角视频 High Street 鈥 Greggs hoped that lower rents would help it get into areas it has previously not been able to.
Mr Whiteside said: 鈥淲hat Covid has done is open up some areas that we previously found difficult to access.
鈥淢ost of the shop opening pipeline is shops that are accessible by car, so we鈥檙e talking about retail parks and petrol forecourts and the like, which have been most of what we鈥檝e been opening in recent years.
鈥淥n top of that, because Covid has impacted the marketplace more generally, places like central London and mass transport hubs, the availability of property has improved and the rental levels have fallen.
鈥淪o we opened a couple of shops even at the end of last year in St Pancras Station. They became available, and even though St Pancras isn鈥檛 busy yet, it鈥檚 going to be busy when things get back to normal and we want to be ready for that. We鈥檙e now looking at half a dozen sites in central London, and we鈥檝e got negotiations going on in other transport hubs that suddenly have become more accessible to us. Those get added to our existing pipeline.鈥
Greggs started a delivery partnership with Just Eat just before the pandemic, and has seen takeaway sales to become almost 10% of its business in recent weeks. The delivery service also supports Greggs鈥 long-held desire to take a share of the evening meal market.
鈥淚t opens up the evening for us because we close at six o鈥檆lock,鈥 Mr Whiteside said. 鈥淭wo-thirds of demand for delivery is in the evening and we鈥檙e not even there, so we鈥檙e starting experiments now with opening later so that we can get food to people鈥檚 homes when the demand is there. That for us is another growth opportunity.鈥
If Greggs鈥 plans to open 100 new shops this year come to fruition, the company estimates it would create around 1,000 jobs 鈥 more than it had to cut last year. It would also be able to give more work to existing staff who agreed to reduce hours during the pandemic.
But the location of those stores will provide a clue to where Greggs sees its future.
Few of them are likely to be on the High Street. Instead they will open at retail parks and in petrol stations, meeting Mr Whiteside鈥檚 belief that Greggs should be wherever people are, and wherever people are hungry.
鈥淕reggs is a different kind of business to a conventional retail business,鈥 he said. 鈥淢ost retail businesses rely on customers leaving their home to go to that place because that鈥檚 the mission they鈥檙e on.
鈥淕reggs does not. Nobody leaves the house to find Greggs, that鈥檚 not what they do. They leave the house to go somewhere else and when they get hungry, they look around. If there鈥檚 a Greggs there, they might pop in and get a Greggs. We intercept other missions.
鈥淭he reasons retailers are struggling is that if people now realise they don鈥檛 need to get into the car to find the shop and they can do it online, the trip isn鈥檛 made. From our perspective, the risk for us is that, if fewer people are making the trip to another retailer, they might not find themselves next to a Greggs when they get hungry.
鈥淢y view is, that鈥檚 fine: there might be less footfall for shopping reasons, which we鈥檝e acknowledged for years and years. People will spend less time buying clothes now because they鈥檒l buy it online instead, in which case they鈥檒l have all this time. I don鈥檛 think they鈥檒l stay at home. They鈥檙e going to go out and do something else and wherever they go, they鈥檒l find a Greggs there. That鈥檚 the plan.鈥
The food on offer in Greggs is also likely to change, if only gradually.
The click-and-collect service, allied with a new app being developed by the company, will allow Greggs to offer sandwiches to order that can be picked up at agreed times. The company is also likely to expand its range of pizzas and is investing in new coffee machines to develop the range of drinks it offers and rival the likes of Costa and Cafe Nero.
Though its food development team was furloughed during the pandemic - halting work on a vegan doughnut - they are now back and working on a number of vegan versions of popular items, following the success of the vegan sausage rolls and steak bakes.
What will remain a constant at Greggs is its community commitment, well known in the North East through its Greggs breakfast clubs in schools and the work of the Greggs Foundation.
Last month the company issued its first sustainability plan with 鈥10 things we鈥檙e doing to help make the world a better place by 2025鈥.
The plan outlines a range of measures to make its operations more environmentally friendly and better for the communities it operates in, including reducing plastic packaging, increasing its healthy food options and having better animal welfare policies.
For Mr Whiteside, the plan built on the foundations of company leaders that came before him.
He said: 鈥淕reggs, right from the beginning 鈥 from John Gregg to his son Ian Gregg and beyond 鈥 has always been a business that sought to be a good corporate citizen and has had activities that support local communities. Trying to make great quality food accessible to everybody, not just to the well-to-do.
鈥淭here鈥檚 a separate Greggs Foundation that was set up by Ian Gregg 30 years ago. We鈥檙e well known among those who know for our support of people in hardship, things like our Greggs breakfast clubs. But we tend not to publicise that because we don鈥檛 want it to be misinterpreted, that we鈥檙e only doing it for the brand. We鈥檙e doing it because we genuinely think it鈥檚 the right thing to do.
鈥淥ver the years that whole agenda of trying to be a better business has taken on an importance now which is becoming of interest to investors; they鈥檙e interested in how your business operates.
鈥淲e responded to that by pulling together everything we鈥檝e done to rate and asking what we can do to stretch ourselves further. That led to our sustainability report 鈥 we need to tell the world what we鈥檙e doing and be held to account for it.鈥
