Greggs continues to deliver robust numbers and once again raises earnings guidance. Footfall to its shops is still lower than pre-pandemic, but those who are visiting are spending more and Greggs now also has a thriving delivery service to keep the tills ringing.
“More people back working in the office should play well to Greggs as that should drive more traffic to its stores at lunchtime and for coffee breaks in the morning and afternoon,” says Russ Mould from AJ Bell.
“Equally, expansion of its car-based sites including drive-through stores is well timed given how many people have stuck to their own four wheels rather than use public transport since the pandemic began.
“Greggs is reaping the benefits of having built up a good reputation for quality products at affordable prices. As economic activity picks up, its brand strength should see it act as a magnet for hungry individuals.
“The timing is also perfect for the next leg of its vegan product rollout. In 2019 Greggs created quite a splash when it launched the vegan sausage roll, attracting people to its shops who wouldn’t normally go there, and becoming the talking point of the nation when it came to savoury snacks.
“Now comes the vegan version of its sausage, bean and cheese melt. It’s creating a buzz about the brand again, just at the point when post-lockdown pent-up demand has started to fade, and more food businesses are vying for a share of the consumer’s wallet.
“The scope for product innovation is huge. Greggs could do many different vegan twists on classic meat products to not only broaden its appeal to the public but also keep the marketing buzz going.
“Never one to stand still, Greggs is pressing ahead with expanding its store estate and is also pushing a pre-ordering facility so that people can pop in on their way home and not have to hang about or be disappointed that their desired product is no longer available.
“It’s also gone down to the classic route of having a loyalty scheme with rewards, another way of helping to attract repeat business from customers.
“For what is essentially a business selling basic hot drinks and flaky pastry-based snacks, Greggs is very innovative in terms of the way the business is run and finding opportunities to grow. It truly is a great British retail champion.”