Greggs Sainsbury's cafe sheffield

Source: Greggs/Sainsbury’s

Greggs was ‘very happy’ with the performance of its first café in a Sainsbury’s store

Greggs has said it is aiming to increase its presence in supermarkets as a key driver of its store expansion plans. 

Greggs opened 220 new stores in 2023. It included five new sites as part of a new partnership with Sainsbury’s, launched in May, which added to its existing tie-ups with Tesco, and four stores in Asda. It also has a growing partnership with high street chain Primark

Greggs CEO Roisin Currie said she wanted to open between 140 and 160 new stores in 2024, of which “a number” would be supermarket locations. 

“We have got plans for more this year. We’re building really strong relationships with them,” Currie said, adding that Greggs property teams were working with supermarkets to find more locations.

The first few sites with Sainsbury’s had been opened as part of a trial. However, Greggs had been buoyed by the sales at its first standalone café in a Sainsbury’s, which opened at the supermarket’s Crystal Peaks store in Sheffield in October.

“Sainsbury’s are very happy with it, we’re very happy with it, and it gives us a route to more opportunities with them,” Currie said.

The retailer had closed 75 stores, and relocated 42 during the year. Currie has previously expressed a desire for Greggs to have 3,000 outlets over the coming years. 

Greggs is now the go-to breakfast location

Currie was speaking following the publication of what were “record” annual results for the high street chain. 

Sales across its 2,473 stores grew 19.6% in 2023, with pre-tax profits growing 13.1% to £167.7m.  

Expansion of Greggs’ store footprint and opening hours had helped it achieve an “all-time high” 8.2% share of the food to go market. It had also overtaken McDonald’s as the UK’s number one breakfast location, with a 19.6% share of morning visits.

There had been a permanent shift among customers, who had developed “more value-driven behaviour” and wanted their money to work harder, Currie said. She highlighted Greggs’ £2.85 breakfast roll and coffee offer as a “cracking deal”.

In some locations, customers had also switched from competitor brands, Currie added.

Greggs is also working to grow its share of dinner sales, with 1,200 of its stores now opening until 7pm or later. New pasta and piri piri chicken salad options were set to launch in the coming months, it said.

“We’re just entering the dinner market,” Currie said, adding that Greggs’ share was just over 1%. “We’re proud of the breakfast pace, but will continue to work hard at the other day parts.”

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The expansion of Greggs’ loyalty app had also attracted customers, with app scans more than doubling to 12.5% (from 6.2%) of company-managed shop transactions in 2023, compared with the previous year.

The baker would “absolutely” continue to review its loyalty offer over the year, Currie said. It wanted the scheme to remain free to members, rather than introduce a paid subscription scheme, such as those seen at other food to go competitors, like Pret a Manger.

It’s “topline offer” of ‘buy nine products, get the tenth free’ equated to a 10% discount on Greggs products. Customers are also offered gifts like concert tickets and treats on their birthday.

Greggs had also been running “nudging” trials on the app to boost sales of particular lines, including pizza, Curry said.

Greggs increased prices slightly at the end of last year, Currie said. However, there were “no current plans” to increase prices for the rest of 2024, based on its current forecast of 4%-5% inflation, which had factored in both national living wage and the rise in business rates set to come in April.

Currie conceded that this forecast did not account for any macroeconomic events that emerged throughout the year. While there had been some deflation on some categories, wage inflation meant there were no immediate plans to drop prices.

“It’s prices are rising slower, rather than across the board prices are coming down,” Currie said.