With stylish interiors but low prices, Greggs Moment is likely to pose as much of a threat to McDonald’s as to Starbucks and Costa, says James Halliwell

A shiny new version of Greggs has arrived in Newcastle.

But instead of shoving a sausage roll in a paper bag and bidding you ‘ta-ra’, this one wants you to take a moment, curl up on a sofa and enjoy a pot of tea. The whole experience looks so far removed from a usual trip to Greggs that the new concept seems slightly baffling at first. Yet the plan couldn’t be simpler.

Greggs Moment is offering a premium coffee shop experience without charging premium coffee shop prices. It’s a message that will resonate with anyone who has winced at the till at popular high street coffee shops. But can Greggs, which this week announced third quarter sales growth of 5.6%, mix it with the Starbucks and the Costas? Or might it go the way of high-profile chains such as Coffee Republic and get ground down like a handful of cheap robusta beans?

On appearances alone, Greggs Moment certainly looks good enough to succeed. When the ­designers dreamed up the new look, they ripped apart the Greggs style guide like a brickie tucking into a piping-hot steak bake. The new shop is light, bright, airy and inviting. Perfectly frosted cupcakes sit next to fresh buttery croissants. Overstuffed focaccia sandwiches are offered ‘Just the way you like’ with choices of sauces, salads and other extras. ‘Gourmet’ square pies are baked on the premises. But the prices are still low. Sandwiches start at £1.55, a 12 oz latte or cappuccino is £1.85.

Away from the counter, luxurious Chesterfields squat either side of dark wooden coffee tables. The floors are carpeted, wallpaper lines the walls. Bookshelves bulge with hardback classics. Table lamps glow in every corner and there’s free WiFi. In fact, you could be forgiven for pausing halfway through your first bite to wonder if you haven’t stumbled into a parallel universe where everything is back to front. Certainly, the sight of the new fascia was enough to stop confused Geordies in the street days before it opened. One picture was uploaded on to the Greggs Facebook page and succinctly ­captioned: “Explain?”

“We are offering a fantastic coffee shop experience that is more affordable,” says Greggs CEO Ken McMeikan. “Customers’ appetite for outstanding fresh food in a relaxed, sociable coffee shop setting is greater than ever before, as is their search for good value. Greggs Moment has incredible prices.”

The early response on Facebook from visitors to the new shop has generally been enthusiastic. And branding experts and strategic ­analysts consider the new concept to be a clever move.

“It is a smart proposition and the timing is perfect,” says Jonathan Hubbard from brand consultancy The Clearing. “We are ­entering an age of austerity and people are looking for alternatives to the really expensive high street coffee shops. Greggs has retained a value proposition, which is important. But Greggs is also investing in an environment for people to hang out in. Things like free WiFi will ­really help.”

Hubbard also highlights McDonald’s success in pushing ­coffee sales hard as an example for Greggs Moment to follow. “McDonald’s is the biggest seller of coffee on the UK high street, so that tells you where the mass market opportunity really lies,” said Hubbard. “I think Greggs will succeed in stealing market share from McDonald’s as well as the more upmarket coffee shops and chains.”

“Clearly they are pricing themselves at a similar level to McDonald’s, so they are likely to be playing in that area,” agrees Jeffrey Young, founder and managing director of Allegra Strategies. “McDonald’s has done a tremendous job with coffee and it has a very big estate of about 1,200 outlets to play with. But so does Greggs, which has 1,500. It could easily add 100 Moments in the right locations if it chooses to. If it builds the brand and gives it its own identity then it could succeed.

“Greggs Moment will keep everyone on their toes.”