Greggs plans to ramp up hot food sales through further menu development in a move aimed at allowing it to extend trading for longer in the day.
Hot food is an area of growing customer demand for the business, with the company widening its food-on-the-go solutions for all times of the day.
Chief executive Roger Whiteside said that Greggs, which yesterday revealed that turnover last year rocketed 7% to £960m, is looking at hot food as a gateway to more market share.
“Sales of hot sandwiches and hot soup are growing well and provide a platform for further menu development, which we intend will create the opportunity to extend trading in Greggs for longer in the day as our reputation grows,” he explained.
Greggs prepares food fresh in its shops each day, with the company successfully building on its traditional categories of baked savoury snacks, sandwiches and cakes over recent years.
Breakfast-on-the-go is one new area that is delivering strong returns for the business, with customers showing an appetite for its £2 breakfast meal deal.
“This remains our fastest-growing part of our trading day and we continue to build increased spend and visit frequency through menu development,” revealed Mr Whiteside. “Strategically it plays an important role in diversifying demand patterns, making us less reliant on general shopping missions and less sensitive to weather.
Greggs’ menu development teams have also worked hard at meeting demand for healthier food-on-the-go options. Sales of healthier options, including its Balanced Choice range offering fewer than 400 calories and good nutritionals, have grown on the back of an extended menu, with the company encouraging healthier food choices through disproportionate space allocation and promotion in its shops.
Mr Whiteside claims that customers increasingly care where their food comes from and, because Greggs makes the majority of food itself, it is well-placed to deliver food they can trust.
“Unlike the majority of our competitors, who resell bought-in finished products, we are a large-scale food manufacturer in our own right dealing at source with base ingredients,” he said. “We have invested significantly in recent years, gaining independent accreditation for our sourcing and manufacturing credentials and have set out to lead the food-on-the-go sector in eliminating or reducing unnecessary ingredients at the same time as providing full information to allow customers to make informed choices.”
Whiteside said that the key consideration when customers choose where to shop for food-on-the-go is convenience. It is focused on increasing shop numbers to put branches in easy reach of customers.
Last year it opened 131 new shops (including 45 franchise units) and closed 41, growing the estate to 1,854 shops trading as of 30 December 2017.
Mr Whiteside said that the number of shop refurbishments slowed down last year as it reached the end of its programme to transform its legacy bakery shops to food-on-the-go formats.
“We completed 132 refurbishments and franchise partners refurbished a further ten units. We also successfully developed a new Drive Thru format that will allow us to compete effectively in this type of location as we seek new sites,” he said.
Greggs aims to add in the range of 110-130 net new shops this year. The majority of these will strengthen its presence in travel, leisure and work-centred catchments, which collectively account for almost 35% of its shop estate today.